2. At all times relevant hereto, Phil B. Sullivan, defendant, was majority common stockholder of said corporation.
3. At all times relevant hereto, Phil B. Sullivan was a director of Westwood Apartments, Inc.
4. From 1959 and at all subsequent times relevant hereto, Westwood Apartments, Inc. was in default on two certain mortgages held by the Federal Housing Administration.
5. At all times relevant to this action, Westwood Apartments, Inc. was insolvent, as that term is defined in case decision construing, Title 31 U.S.C. Annotated, § 191, to wit: said Westwood Apartments, Inc. had total liabilities greater than its total assets and further could not meet its then current liabilities out of its current income.
6. On July 25, 1961, the United States commenced foreclosure proceedings against Westwood Apartments, Inc. and a correct copy of the Complaint in foreclosure has been marked Exhibit C and made a part of the Complaint in this action.
7. On July 27, 1961, John A. Scott was appointed Receiver for Westwood Apartments, Inc. by the Honorable Rabe F. Marsh, United States District Judge for the Western District of Pennsylvania.
8. As a result of foreclosure proceedings and sale of said Westwood Apartments, Inc. on June 26, 1962, there resulted a deficiency on both mortgages in the total sum of Eighty Nine Thousand Five Hundred Three Dollars and Thirty Two ($ 89,503.32) Cents with interest at 4% From that date. The computation of the deficiency is set forth in Government Exhibit D.
9. By letter dated January 17, 1961, set forth in Government's Exhibit A attached to the Complaint filed in this action, defendant was instructed by the Director of the Federal Housing Administration's Office in Pittsburgh, Pennsylvania, to refrain from making any payments of any kind whatsoever to any of the common stockholders, officers, or directors of the corporation, from cash funds or other assets of the corporation, and to preserve all of the assets to the very best of his ability. Said letter was made pursuant to FHA regulation of which defendant had knowledge. Defendant in contravention of this order, made payment to himself in a fashion more fully described in paragraph 11 below.
10. Defendant deposited sums in the checking account of Westwood Apartments, Inc. in amounts and on the dates below set forth:
March 14, 1960 - $ 500.00
April 13, 1960 - 500.00
May 17, 1960 - 1,000.00
June 18, 1960 - 500.00
© 1992-2004 VersusLaw Inc.