- 17 -
equipment. CFP used the $450,000 Residco note to reduce its
promissory note obligation to ERA (that was incurred above in
step 2).
9. On January 3, 1995, in a purported section 351
nonrecognition transaction, CFP transferred to CFX Financial
Services, Inc. (CFX Financial), a subsidiary of CFX: (1) CFP’s
remaining master lease residual interests with respect to the K-
Mart, Shared, and other equipment (i.e., its master lease
residual interests in that equipment, less the first 2 years of
the master lease residual interest in the K-Mart equipment and
the first 6 months of the master lease residual interest in the
Amoco equipment that were sold to Residco as described above in
step 8); (2) CFP’s master lease rental payment obligation to EQ;
(3) the right to receive offsetting payments from EQ under the
$14.125 million EQ equipment purchase installment note; and (4)
the $747,910 EQ short-term promissory note. In exchange for
CFP’s transfer, it received 75,000 shares of CFX Financial $1 par
value preferred stock. On that same date, CFX contributed $2.8
million to CFX Financial and received 280 shares of CFX Financial
common stock. (The assignment and assumption agreement between
CFP and CFX Financial dated January 3, 1995, notes that the
master lease equipment was subject to CLI’s lien under the
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011