- 7 -
Sometime in or about October 2000, Countryside borrowed
$8.55 million from Columbus Bank & Trust Co. (CB&T), and, on
October 30, 2000, (1) Countryside contributed that entire amount
in cash to CLPP in exchange for a 99-percent interest in CLPP,
and (2) CLPP contributed $8.5 million in cash to MP in exchange
for a 99-percent interest in MP. Therefore, on or about October
30, 2000, Countryside was a 99-percent shareholder in CLPP, and
CLPP was a 99-percent shareholder in MP.
On or about October 30, 2000, MP borrowed $3.4 million from
CB&T. Both CB&T’s $8.55 million loan to Countryside and its $3.4
million loan to MP were guaranteed by Mr. Winn, and the loan to
Countryside was secured by the Manchester property. Both loans
provided interest at an annual rate equal to the London Interbank
Offering Rate (LIBOR) plus 175 basis points. The due date was
May 1, 2001, for the $8.55 million loan to Countryside and
November 1, 2003, for the $3.4 million loan to MP.
On or about October 31, 2000, MP used the $8.5 million
received from CLPP and the $3.4 million borrowed from CB&T to
purchase four privately issued notes from AIG Matched Funding
Corp. (AIG) in the aggregate principal amount of $11.9 million
(the AIG notes). The AIG notes were for principal amounts of
$6.2 million, $2.6 million, $2.3 million, and $800,000. Each
note became due on October 31, 2010, although the holder of each
note possessed a right of redemption exercisable, in whole or in
part, on the fifth interest payment date (April 30, 2003). Each
note provided for interest at an annual rate equal to LIBOR minus
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Last modified: March 27, 2008