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CroWninG aCHieveMent: Harvey, tHe General Counsel
Q: So this would affect both projects in which Coronet Properties was involved and properties to which Coronet Capital had made loans?
A: That’s right. Many of the borrowers were in the co-op conversion business, and those with other types of property were adversely affected as well.
Q: What was the overall effect of the slump in the real estate market on Coronet Properties?
A: It was pretty clear from where I sat that a lot of scrambling was going on and that, unless Coronet were to be more successful in selling the apartment units that it owned, there would be a significant danger of bankruptcies in the air.
Q: How did this affect you?
A: Apart from the fact that I had reason to worry about the company
at large, I was concerned that I might personally be put in a difficult position.
Q: Did that happen?
A: Yes. One day I was in the hall, and Fred walked over and said
something like, “Oh, by the way, Norman wants you to draft a promissory note.” He told me that the note should provide that an entity—I forget which—promised to pay a large sum of money to the sponsor of a large property, probably Sky View. Further, Fred said the note was to be dated (most people would say “backdated”) as if it were made months in the past—at a time when the requirement to capitalize the sponsors was already in effect. This was a real test for me.
Q: Why was this a test?
A: My sense of smell told me that an “Oh, by the way” signals the
imminent arrival of a request that will not be trivial. Fred’s catching me “fortuitously” in the hall added to my sense that there was a problem. It seemed that he wished to catch me off balance and to do
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