On November 16, 1981, Torcivia and Schaffel, as general

partners, along with Kanter and other limited partners, formed

the One River Partnership.    Exhs. 986, 211.   One River

Partnership was formed to acquire real estate located in

Middletown, New Jersey, and to construct an office building and
                               -120-

hotel on the property.   Exh. 986; Schaffel, Transcr. at 404-405.

Torcivia and Schaffel each acquired a 36-percent general

partnership interest in One River Partnership, and Kanter held an

8-percent limited partnership interest.   Exh. 986, sch. A.   Lisle

was not a direct partner in One River Partnership.   Id.became

dissatisfied with the performance of the hotel management company

that was managing and operating some 16 Rodeway Inns motels that

had been financed by Prudential.

     Eulich decided to establish his own hotel management

company, MHM, to operate the motels.     Eulich arranged to have

Robert James (James), who had substantial hotel management

experience, serve as MHM’s president and manage MHM’s day-to-day

operations.   MHM was incorporated on January 1, 1975.    MHM’s

three shareholders eventually included Eulich (who was the
                               -133-

majority shareholder), James, and another longtime business

associate, C. Huston Bell.

     In