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Virtually all of CAP’s income from the sale to Aardan was
allocated to Kanawha (CAP’s 99-percent limited partner) and in
turn to the Iowa Tribe. Although not directly a partner of CAP,
the Iowa Tribe was the 99-percent limited partner of Kanawha.
Aardan was organized by Mallin before 1995. Roland
Hennessey (Hennessey), who was also an officer of Jenrich, signed
the September 1, 1995, sales agreement on behalf of Aardan. At
Mallin’s request, Hennessey, beginning in 1986 or 1987, served as
an officer of several corporations (including Aardan and Jenrich)
and at some unspecified point, eventually was designated as
Aardan’s owner. Hennessey had retired as a police officer before
his involvement in these transactions. In exchange for
Hennessey’s serving as an officer and/or owner of these various
corporations, Mallin paid Hennessey $1,000 per month.
Hennessey’s role in these corporations was that of a nominee who
signed documents. Hennessey had no involvement in negotiations,
decisionmaking, or business activities of the corporate entities.
5. Pursuant to a September 28, 1995, document, CAP, in
exchange for 10 shares of CMACM common stock in a purported
section 351 transaction, transferred, among other things, the
following to CMACM: (1) CAP’s rights under the over lease; (2)
the $4,056,220 Jenrich equipment purchase installment note; (3)
CAP’s over lease rental payment obligation to Jenrich; and (4)
$215,000 of CAP’s obligation to EQ under the $750,000 CAP
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