Opinion ID: 552196
Heading Depth: 2
Heading Rank: 3

Heading: The Participation Agreements

Text: 21 Lynch explains that he suddenly released the Account equity balances to Aubin because Aubin told Hutton that he was 'broke' and was 'going under' unless Hutton allowed him to withdraw equity in his trading accounts to make payroll and pay some $20 million in loans. Lynch's only condition for the release was that Haralson find someone to purchase a $4 million participation in RBI's Note from Hutton, and thus repay Hutton the seed money it had placed in the Accounts three months earlier. Aubin secured just such a participation from Guiness Mahon Trust Company by personally guarantying Guiness Mahon's repayment. 22 The deal between Hutton and Aubin was memorialized on June 7, 1985 in two contracts executed by Lynch on Hutton's behalf, Woo on RBI's behalf, and Haralson (the Participation Agreements). All three parties mutually agree[d] that the Facility Agreement [and Note] remain[ed] in full force and effect. Upon receiving the $4 million from Guiness Mahon, Hutton Group surrendered all claims and liens against the Accounts and permitted Aubin to continue trading with Hutton or transfer his business to another broker at his option. Aubin traded in the Accounts until September 1985, having withdrawn approximately $49 million in equity since March 1985.