:tyou: Gotcha! And thanks for the great information. So DM very well could have used the loan money which was meant for tools and employees and purchased a condo. Cash advances. Or the tools which were purchased were sold by DM and the money went toward the purchase of a condo. DP claims DM is smart; maybe he is right. After all, there are many different types of smarts. C Olsen was very smart in swindling, robbing, lying, ect. but not book/schooling smart. JMO.
Technically you could be correct. A streamlined method often employed by banks would be as follows
1. WM builds a $6M hangar
2. Bank says we will lend up to $3M
3.So WM has a floating line of credit , secured by a mortgage on the building , from $0 to $3M , for M.Air , and for all practical purposes WM (or DM) can do whatever he wants with it .
He could use it for a round the world trip if he wanted , but he would have to draw it out as wages and pay 50% personal income tax on it. The banks could care less , they are well secured. (that would never be the case if it was a typical business with high debts , banks are not fools , but WM had plenty of assets and little debt and probably excellent credit)
With the MRO put on hold , the banks could get jittery and call in the loan , but I doubt it , and even if DM "sucked it dry of cash" the banks could foreclose and sell the building to recover the $3M .... but I highly doubt anyone (DM) would go that route , there is no need , if DM needed money he would be better to sell the hangar himself , pay the bank , and pocket the remainder , and have a good credit report.
We could speculate to no end , but I bet the farm and condo purchase funds came from some other source , maturing bonds or investments etc , I do not think WM had all his eggs in one basket (Hangar)
Personally (my guess) is that any M.Air debt would be insignificant in the big picture ..... the hemorrhaging of funds would be paying all the staff and aircraft technicians before they were open for business , that is unrecoverable money .... probably was a wise decision for DM to cancel the MRO and lay off staff ..... my opinion is based on WM having secured a great core staff from a different MRO that had closed , that , along with the Transport Canada certification was the "valuable" part of the MRO .... but like I said , if the MRO was not up and running it would be dreadfully expensive to meet payroll. (minimum $500k per year for 30-40 aircraft engineers)
All speculation on my part , just playing with numbers ..... we could beat this thing to death and still be clueless as to what is actually happening
My guess ????? MB and advisers are selling condos and houses to pay off the (probably small) debt , and then be free and clear to make the next decisions.
Plus pay for lawyers !!
But if it is a slam-dunk case for the prosecution , DM's legal costs will be minimal . Probably even some early guilty pleas to come in this whole case, all depends on "the evidence"