- 28 - possibility, petitioner was seriously concerned about the effect that this development would have on its reputation among owners and potential owners of Foretravel coaches. Petitioner's original acquisition of 51 percent of the stock of Northwest from Fishfader was made in order to keep Northwest in existence. The 51-percent ownership was not intended to be permanent; it was expected that the stock would be sold to Nicholson and that petitioner would be out of the picture in terms of stock ownership. As the facts set forth above indicate, this did not happen. In fact, the situation went the other way, and Nicholson began to develop financial problems. Petitioner's officers believed in their best business judgment that petitioner should advance cash to Northwest to help Northwest stay viable. As the situation developed, matters went from bad to worse, all as outlined above. Petitioner continued to respond to each new crisis with more cash for the reasons already set forth. Petitioner got into the Northwest situation deeper and deeper as problems developed. Petitioner argues that the advances made were for the purpose of bailing out and salvaging Northwest, all for the business purposes and best interests of petitioner. Petitioner also argues that the amounts advanced to Northwest should be deductible either as bad debts or as uncollectible accounts receivable, or some combination thereof, without regard to the usual criteria for creating a debt.Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Next
Last modified: May 25, 2011