-294-
terminating their “consulting arrangement” and stating that
“fundamentally no services appear to have been performed for a
number of years”. Kanter’s letters went on to state that Freeman
was so preoccupied with his own legal woes during the latter half
of the 1980s that he was not managing IRA and the persons issuing
the checks were simply “administering tasks”.
Upon closer examination, Kanter’s letters to the children
are remarkable in that they demonstrate Kanter’s attempt to
rewrite history in the face of an expanding IRS examination. In
fact, Kanter’s letters were inconsistent with both the record in
these cases and earlier explanations Kanter offered for the
organization of Carlco, TMT, and BWK.
Recall that IRA liquidated KWJ Corp. in late 1983 and
transferred its rights under the Hyatt Corp./KWJ agreement to
Carlco, TMT, and BWK in a 45/45/10 percent split as part of an
alleged free cashflow asset allocation. Carlco, TMT, and BWK in
turn formed KWJ Partnership, which received both the Hyatt Corp.
payments and loans from IRA (which were used to fund the payments
to Ballard’s and Lisle’s children). Recall also Kanter’s
explanation that Carlco, TMT, and BWK were removed from IRA’s
consolidated group of corporations in 1984 in part to ensure
Ballard and Lisle could manage TMT’s and Carlco’s assets (which
included the cash distributions from KWJ Partnership and loans
from IRA) without interference from IRA’s officers. Consistent
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