Zalman Melnik and Lea Melnik - Page 8

                                        - 8 -                                         
          Formation of the Rashi and Rambam Trusts                                    
               On a date that does not appear in the record but was                   
          sometime before the sale of their HouTex stock, the Melniks                 
          decided to enter into the private annuity transaction that Mr.              
          Pennoni had suggested.  At the Melniks’ request, Moshe Taub, an             
          Israeli citizen, agreed to establish trusts for their benefit.              
          Mr. Taub had served with Zalman Melnik in the Israeli Army and              
          was an old and trusted friend of the Melniks.                               
               On a date that does not appear in the record,7 Mr. Taub                
          executed two trust indentures, dated November 4, 1996, that                 
          established the Rashi and Rambam Trusts and appointed Bermuda               
          Trust as trustee.8  The initial corpus of each trust consisted of           
          $10,000.9  The trust indentures provided that Bermuda Trust had             
          “sole and absolute discretion” to make distributions of any or              
          all of the trust income or corpus to any one or more of the                 
          beneficiaries.                                                              

               7The trust indentures are dated Nov. 4, 1996.  However, in a           
          letter to William Maycock, a Bermuda Trust trust manager, dated             
          Oct. 14, 1996, Mr. Pennoni sent to Mr. Maycock trust indentures             
          that had already been signed by Mr. Taub.                                   
               8Although the trust indentures are dated Nov. 4, 1996, Mr.             
          Maycock signed the trust indentures on behalf of the trustee                
          sometime between Nov. 20 and Nov. 22, 1996.                                 
               9On Oct. 8, 1996, Mr. Taub’s bank in Israel issued two                 
          $10,000 checks to fund the Rashi and Rambam Trusts.  On Oct. 14,            
          1996, Mr. Pennoni mailed the checks to Mr. Maycock.  However, the           
          checks were not credited to (and presumably not deposited into)             
          trust accounts until Jan. 23, 1997, although Bermuda Trust, on              
          Nov. 22, 1996, acknowledged receiving the checks.                           





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011