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From time to time the corporate loans were renewed, which
renewals were evidenced by the execution of new notes. At first,
these renewal notes were signed on behalf of the corporation by
petitioner in his capacity as a corporate officer. With respect
to some renewal loans, petitioner pledged his personal assets as
security. At or about the same time, petitioner also executed
loan notes and renewal notes with First Madisonville in his
individual capacity.
On June 20, 1988, the corporation forfeited its corporate
charter. On September 23, 1988, the corporation filed a
bankruptcy petition in the Southern District of Texas, Houston
Division.
In or around 1990, First Madisonville requested that
petitioner sign a renewal loan note for the corporation’s prior
loans (the final renewal note). The final renewal note
(approximately $40,000, exclusive of accrued interest) is signed
by petitioner in his individual capacity, not in his capacity as
an officer of the corporation.
In 1997, petitioner was having significant financial
problems. In addition to the corporation, petitioner had a
financial interest in another automobile dealership that also
went out of business. According to petitioner, as of that time
“all of * * * [his] money was gone.”
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Last modified: May 25, 2011