PK Ventures, Inc. and Subsidiaries, et al. - Page 28

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          During that period, PK Ventures’ limited partnership interest in            
          PKVI LP increased from zero to 29 percent (i.e., PK Ventures                
          acquired the entire limited partnership interest in PKVI LP).               
          PK Ventures’ increased ownership interest in PKVI LP was due, in            
          large part, to partners owning at least 24.65 percent of                    
          PKVI LP’s limited partnership interests assigning their interests           
          in the partnership to PK Ventures for apparently no consideration           
          other than relief from the partnership’s liabilities.                       
          Furthermore, these assignments occurred during the time in which            
          PKVI LP was experiencing serious financial difficulties.  These             
          facts do not support a conclusion that the transfers from                   
          PK Ventures to PKVI LP were bona fide loans.  Rather, these facts           
          indicate that PK Ventures gained a greater ownership interest in            
          PKVI LP by its willingness to assume the liabilities of the                 
          partnership and to provide the partnership with capital to pay              
          those liabilities.                                                          
               Eighth, as a result of holding approximately 76 percent of             
          the partnership interests in PKVI LP as of February 16, 1990,               
          Rose and PK Ventures gained the exclusive right, power, and                 
          authority to make calls for additional capital contributions on             
          behalf of PKVI LP, to permit a withdrawal of capital by any                 
          partner, to admit an additional partner to the partnership, to              
          permit the withdrawal of any partner from the partnership, to               
          designate any additional investments for the partnership and to             






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