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(RAM Drilling); TMC Farms, Inc. (TMC Farms); TMC Oil Company
(TMC Oil); Marco Oil, Inc. (Marco Oil); and Sentry Investment
Company (Sentry).
On January 25, 1982, Marco Oil made two loans, one to RAM
Drilling for $2,700,000, and another to TMC Farms for $420,000,
both at the stated interest rate of 14 percent. The notes to
Marco Oil from RAM Drilling and TMC Farms were later assigned to
TMC Resources upon the liquidation of Marco Oil. All payments
on the loans to RAM Drilling and TMC Farms were applied 100
percent to principal. None of the loan payments was applied to
any accrued interest. On October 29, 1982, the stated interest
rate was eliminated, and thereafter the loans of the principal
balance and subsequent advances accrued no interest.
On March 25, 1983, TMC Resources contributed its Sentry
stock to RAM Drilling. On March 26, 1983, TMC Resources
contributed its TMC Farms stock to RAM Drilling. On March 28,
1983, TMC Oil and Marco Oil were liquidated, and all of their
assets and liabilities were distributed to TMC Resources. On
the same date, Sentry was liquidated by RAM Drilling.
On March 31, 1983, TMC Resources was liquidated pursuant to
section 337 with all of its assets and liabilities distributed
to petitioners, its four equal shareholders. As part of the TMC
Resources liquidation distribution, petitioners received the
notes originally given to Marco Oil by RAM Drilling and TMC
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