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determine the participating percentages of the partners in such
additional investments, to sell or otherwise dispose of all or
substantially all of the partnership’s property attributable to
any investment, to permit any agreement between the partnership
and any general partner or any person controlled by or
controlling or under common control with a general partner, and
to permit the transfer or assignment, in whole or in part, by a
partner of his interest in the partnership. Prior to
February 16, 1990, PK Ventures needed the approval of limited
partners holding at least 67 percent of the aggregate voting
percentages of the limited partners of PKVI LP to exercise its
authority over these matters. PK Ventures’ increased
participation in PKVI LP’s affairs during the time in which it
was transferring significant amounts of funds to the partnership
does not support a conclusion that the transfers from PK Ventures
to PKVI LP were bona fide loans.
Ninth, based upon Rose’s experience in corporate finance, we
are convinced that he could have arranged for the transfers from
PK Ventures to PKVI LP to occur under terms significantly closer
to arm’s length than those that were actually chosen. This
conclusion is bolstered by our consideration of the structure and
formality of (1) the financing arrangements into which
PK Ventures had entered in connection with the purchase of the
stock of SLPC, TBPC, TPC, and TPTC; (2) the Summit Trust loan;
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