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Connolly had adequately capitalized GHM.114 At best, GHM was
capitalized with $2,000.
The partners of Essex Partnership and their partnership
interests were as follows:
Percentage
Partner Partnership Interest
MHM 47.500
IRA 26.125
THC 21.375
Connolly 5.000
At trial, Connolly (1) did not know the identity of the
partners of Essex Partnership, (2) believed he was offered a 5-
percent partnership interest in Essex Partnership in exchange for
his promise to refer to Eulich any hotel management contracts
that GHM could not handle in the northeastern region of the
country, and (3) did not understand that a portion of GHM’s
management fees was remitted to Essex Partnership.
Essex Partnership’s stated purposes were (1) “To engage
generally in the consulting business and as a liaison
intermediary between owners and operators of hotel properties”,
and (2) “To enter into other partnership agreements * * *, to
114 At trial, Connolly (1) could not recall any details
about the GHM option agreement or whether he had received any
payments pursuant to the option agreement, (2) did not know
whether he had owned all of the shares of GHM, (3) could not
recall speaking to Eulich about startup financing of $10,000 for
GHM, and (4) could not recall whether the board of directors held
meetings at GHM or the membership of the board.
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