-23-
following amounts of lease income, interest expense,
depreciation, and income/(loss):
1995 1996 1997 1998
Lease income -0- $1,157,816 $1,646,796 $1,341,589
Interest expense ($150,412) (433,423) (490,523) (285,889)
Depreciation (1,364,400) (2,183,040) (1,309,824) (589,467)
Income/(loss) (1,514,812) (1,458,647) (153,551) 466,233
C. 1998 Amtel Equipment
Amtel Corp. (Amtel) and Third Street Services, Inc. (TSS),
are corporations that are unaffiliated with any Hubert company.
On April 30, 1998, CRG purchased from Starwood for $8,927,204.90
a 60.55-percent interest (60.55-percent interest) in certain
equipment (1998 Amtel equipment) leased by TSS to Amtel.
Pursuant to promissory notes dated April 30, 1998, CRG agreed to
pay Starwood $8,222,860.90 and $235,000. Also on April 30, 1998,
CRG leased the 60.55-percent interest back to Starwood for an
86-month term beginning August 1, 1998.
Also on April 30, 1998, LCL purchased the 60.55-percent
interest (subject to the lease) from CRG for $8,927,204.90.
Pursuant to promissory notes dated April 30, 1998, LCL agreed to
pay CRG $8,172,204.90 and $235,000. No individual member of LCL
signed or directly guaranteed these promissory notes, the first
of which stated it was recourse to the extent of $4.75 million
and that payments of principal and interest would be applied to
the recourse portion before the nonrecourse portion. The second
note stated it was nonrecourse.
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