William H. Maloof - Page 3

                                        - 3 -                                         
          loan involved here is a $4 million loan2 from Provident Bank (the           
          bank) pursuant to a loan agreement dated July 29, 1993.                     
               The $4 million loan consisted of three principal components,           
          each collateralized differently.  First, there was a $750,000               
          equipment note that was secured by equipment Level Propane would            
          purchase with the loan proceeds.  Second, there was a $2.5                  
          million revolving term loan that was secured by petroleum tanks             
          and supply contracts Level Propane owned.  Third, there was a               
          $750,000 demand loan that was secured by the inventory and                  
          accounts receivable of Level Propane.  As additional collateral             
          for the $4 million loan to Level Propane, petitioner pledged all            
          the shares he owned of Level Propane and a $1 million life                  
          insurance policy on his life.                                               
               Level Propane made monthly interest payments on the $4                 
          million loan through an account that Level Propane was required             
          to maintain with the bank.  Petitioner made no payments on the              
               Level Propane defaulted on the loan and was forced into                
          involuntary bankruptcy.  At no time did the bank demand payment             
          from petitioner individually or begin collection action against             
          petitioner regarding the $4 million loan to Level Propane.                  

               2During his testimony, petitioner briefly referred to                  
          approximately $60 million in loans.  Petitioner failed to                   
          introduce any evidence, however, to document any loans other than           
          the $4 million loan from Provident Bank.                                    

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011