Cerand & Company, Inc. - Page 10

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          petitioner before going out of business.  Though no outside                 
          financing was sought, it is reasonable to assume that an outside            
          financier would not have accepted similar credit terms:  an open,           
          unsecured line of credit with no set interest rate, no set                  
          payment schedule, and no fixed maturity date to three companies             
          with no financial history and no capital assets.                            
               As shown by their actions, the parties intended the funds              
          advanced to be an investment in FWC, CAI, and ASC.  For these               
          reasons, we find that petitioner made an equity investment in               
          FWC, CAI, and ASC.  When the three failed to repay petitioner the           
          funds it had extended, petitioner suffered a capital loss.                  
               In light of the foregoing,                                             

                                             Decision will be entered under           
                                        Rule 155.                                     





















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