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Petitioner’s actions, or lack thereof, corroborate that
petitioner never regarded the RVC as having any value. In 1993,
prior to receiving the RVC, petitioner never obtained an
independent appraisal of the equipment, and in 1997, when
petitioner was notified that a payment would not be made under
the RVC, petitioner did nothing to establish the value of the
equipment and to verify that under the RVC petitioner had no
right to receive a payment from ABN.
The various transfers prior to 1993 relating to the Brussels
Leaseback, the Atrium Sublease, and the Trust Fund created
essentially a circular flow of funds with the net result that,
once the $25 million was transferred into the Trust Fund by ABN,
Pierson was obligated to pay itself. Pierson’s only recourse for
the payments under the Brussels Leaseback was from the equipment
and from the funds held in the Trust Fund. Because the $25
million transferred into the Trust Fund represented security for
Pierson as lender on the Brussels Leaseback and because of
Pierson’s status as trustee on and as beneficiary of the Trust
Fund, petitioner had no legitimate interest of value in the Trust
Fund and no legitimate obligations associated therewith.
Petitioner’s claimed $22 million tax deductions relating to
interests held for less than a day in the Brussels Leaseback and
in the Trust Fund constitute merely a tax ploy, a sham, without
business purpose and without economic substance.
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