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execute any documents required by the entities
holding liens for the transfer of titles to the
equipment.
The record also shows that during the year at issue B&L was
able to pay off, as they fell due, installments of B&L’s promis-
sory note which might have encumbered the B&L equipment.6 In
this connection, B&L signed the B&L promissory note payable to
Bank of Ashland around mid-May 1992. That note was in the
principal amount of $900,000 and bore interest at 8.75 percent
per year, which was to be paid in 36 installments of $28,528 that
were to commence on June 13, 1992. The notes to B&L’s financial
statements for the periods ended December 31, 1992 and 1991, show
that at the end of 1992 the balance remaining on the B&L promis-
sory note was $742,299. Thus, the record establishes that at
least during 1992, the year at issue, B&L had the ability to, and
did, satisfy its obligations under the B&L promissory note to pay
the monthly installments of principal and interest due under that
note. On the record before us, we reject petitioners’ assertions
that B&L “was in a dire financial position and its ability to pay
off the substantial amount of debt encumbering the equipment was
in grave question” and that “there was a realistic possibility
6Although the B&L promissory note states that B&L gave a
security interest to Bank of Ashland in, inter alia, goods or
property that B&L was purchasing and various vehicles, it is not
clear from that note or the remainder of the record whether some
or all of the B&L equipment was included within such goods,
property, and vehicles.
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Last modified: May 25, 2011