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shareholder of PK Ventures) and 9 of whom were associated with
Printon Kane. McCarthy was neither a partner in nor an employee
of Printon Kane.
On or about August 20, 1987, PK Ventures transferred
$1 million to the Zephyr purchasers. Of this $1 million, Rose
received $400,000. Rose and the other Zephyr purchasers used
this $1 million to purchase Zephyr’s stock from Mills, to cure
delinquent payments to Zephyr’s creditors, and to provide Zephyr
with working capital. As of August 20, 1987, the Zephyr
purchasers owned interests in Zephyr and in PK Ventures as
follows:
Zephyr Shares Percentage of Percentage of
Shareholder Owned Zephyr Owned PK Ventures Owned
Beason 36 .610% .20%
Cerosky 18 .305 0
Grimmig 708 12.000 12.29
Kane 1,451 24.593 32.09
Kane Jr. 177 3.000 .69
Krutoy 708 12.000 12.61
Mannello 177 3.000 .80
Marshall 177 3.000 .69
McCarthy 88 1.492 .10
Rose 2,360 40.000 40.00
Total 5,900 100.000 99.47
PK Ventures obtained the $1 million that it transferred to
the Zephyr purchasers from Summit Trust (Summit Trust loan). An
entity named Printon Kane Government Securities pledged a
$1 million certificate of deposit as collateral for the Summit
Trust loan. PK Ventures accounted for the Summit Trust loan by
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