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(b) Radcliffe and BOT
As we understand petitioner, he contends that Radcliffe and
BOT had nontax, business purposes for the form of the Bank trans-
actions because (1) by using cash as collateral for the loans at
issue from the U.S. banks in question, Radcliffe and BOT were
able to obtain lower interest rates on such loans than would have
been charged had those loans been secured by second deeds of
trust on real estate and (2) the use of cash collateral obviated
the need to obtain the consent of Lyman Jee, the partner of
Radcliffe and BOT in NMSC and in 300 Montgomery Associates,
respectively, in order to encumber the assets of those partner-
ships.
With respect to petitioner's first contention (viz.,
Radcliffe and BOT had a nontax, business purpose for the form
ofthe Bank transactions because, by using cash as collateral for
the loans at issue from the U.S. banks in question, Radcliffe and
BOT were able to obtain lower interest rates on such loans than
would have been charged had those loans been secured by second
deeds of trust on real estate), the only evidence on which peti-
tioner relies to support his contention is the testimony of Mr.
Richard Catterton, an executive of Citibank. Mr. Catterton
testified generally that a loan secured by a second mortgage on
real estate would "probably" bear interest at a higher rate than
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