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neither MPC nor anyone else could pay them. This was so because
Bucci, MPC's 99.999-percent partner, was sunk in bankruptcy. And
although Intercoastal held a theoretical partnership interest in
MPC, there was no suggestion that it could pay the multimillion-
dollar liabilities owed to the partnerships. Finally, W & A
never acquired any semblance of economic substance before it was
terminated as a result of what Fred called a "mutual mistake".35
Petitioners insist that the structure of the financing
reflects the true nature of the transactions. They retrace each
of the partnerships' alleged operations in exhaustive detail.
They insist that the transactions at issue actually happened,
because Fred recorded them, and that, because the transactions
happened, they had economic substance. For support, petitioners
refer to the language of the stipulations. Many of these
stipulations describe, in the abstract, the form of the
transactions as if those transactions had actually occurred.
Thus, for example, petitioners point to language such as that
contained in paragraph 680 of the stipulations. That paragraph
35We realize, in the case of MIT 80, that there was a
contention that the partners received half the stock of Machise
as recognition of Machise's liabilities to it. We do not take
this contention seriously. Fred unilaterally declared Machise
insolvent; he unilaterally valued its stock in the hands of MIT
80 at $250,000; he induced Bucci to turn over that stock in a
transaction in which Bucci was not represented by counsel; and he
told the partners that they were ultimately entitled to a
$1,154,000 loss on the transaction. In view of the sham nature
of the other transactions, we decline to accept Fred's
uncorroborated and self-serving contentions that MIT 80 acquired
a stock interest in Machise that had any value.
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