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prospects good, and petitioner anticipated the possible private
or public sale of the stock of EPL.
In 1988, no appraisals relating to the value of EPL as a
business were obtained.
The evidence does not indicate that petitioner ever made
demand on EPL for repayment of his purported loans to EPL, nor
does the evidence indicate that petitioner ever undertook steps
to otherwise collect from EPL the purported loans.
In 1988, in anticipation of, among other things, a possible
sale of EPL’s stock and in an effort to enhance the financial
statements of EPL, petitioner went through the exercise of
“forgiving” $1.6 million in purported debt of EPL to petitioner
relating to funds that petitioner over the years had transferred
to EPL.
After 1988, EPL continued to operate as a business.
Petitioner and his son attempted to sell the stock of EPL in a
public offering, and petitioner continued to transfer funds to
EPL. In 1989, 1990, and 1991, petitioner transferred to EPL
funds totaling $616,169, and petitioner received from EPL funds
totaling $573,282. The evidence does not indicate the existence
of any promissory notes or other debt instruments relating to the
funds that petitioner, after 1988, transferred to EPL.
In 1989, in seeking outside investment capital, a new
comprehensive business plan for EPL was adopted.
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