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July 10 - $1 million in the form of a revolving loan line of
credit arrangement with Merchants Bank (the $1 million Merchants
Bank loan).
Both the $3.6 million and the $1 million Merchants Bank
loans were secured by assets of both Paulan and Sidal and
guaranteed by Sidal, Robert, Lovella, and petitioners.
December 8 - $2 million from Merchants Bank (the $2 million
Merchants Bank loan), secured by life insurance policies,
securities, and Paulan real and personal property, and also
guaranteed by Sidal, Robert, Lovella, and petitioners.
Paulan Payments
The July 11 Payment
On July 11, Paulan wrote a check to Sidal for $1.2 million.
The source of that payment was the $3.6 million Merchants Bank
loan. Sidal’s adjusted trial balances for its taxable years
ending December 31, 1997, 1998, 1999, and 2000, reflect the $1.2
million payment to it as giving rise to a note payable to Paulan.
Correspondingly, Paulan’s adjusted trial balances for its taxable
years ending December 31, 1997 and 1998, reflect the $1.2 million
payment to Sidal as giving rise to a note receivable from Sidal.7
Sidal made principal and interest payments to Paulan on that note
of $74,328 in 1997, $178,388 in 1998, $148,657 in 1999, and
7 Paulan’s adjusted trial balances for its taxable years
ending Dec. 31, 1999 and 2000, are not in evidence.
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Last modified: May 25, 2011