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the same project, to create a technology that makes computers
understand their environment.
As creditors were attempting to force AIO into involuntary
bankruptcy, petitioner agreed to sell some of his Colorcom
partnership interest to third parties and lend the proceeds to
CDM. CDM then lent the money to Colorcom and AIO as it was
needed to develop the project. The intent of this transaction
was to place CDM in a better position against AIO’s other
creditors should AIO go into bankruptcy.
In 2001, Colorcom sold 159,500 Colorcom partnership interest
units (units) to third parties on behalf of petitioner.
Petitioner owned these 159,500 units in Colorcom. The purchasers
of the units (purchasers) wrote checks made payable to petitioner
in exchange for the partnership interests. The purchasers
purchased the units with the specific understanding that the
funds paid to petitioner would be used for CDM and not for
petitioner’s personal expenses. The checks made payable to
petitioner were mailed to Colorcom, petitioner endorsed the
checks, and then he signed the checks over to CDM. The checks
totaled $199,375. Colorcom did not report a profit from this
transaction.
CDM deposited the checks from the sale of the units into
CDM’s bank account and recorded an account payable to petitioner
for $199,375. Petitioner is the creditor of this account
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Last modified: May 25, 2011