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general account, cash was transferred from the appropriate third
tier account to the operating company's fourth tier account. All
fourth tier accounts were zeroed out at the end of the day.
Next, the same thing was done for third and then second tier
accounts. Each second tier account was zeroed out with transfers
to or from the first tier master account. The parties to the
CCMP accounted for the transfers between the accounts as
intercompany receivables or payables. The parties to the CCMP
charged what they claim to be interest on all intercompany
payables established under the CCMP.
In July 1987, LTI, Transit, LWSI, and Tree established a
unified CCMP at FNBC. In 1987 and 1988, LTI's CCMP overdraft
limit was between $25 and $30 million for its master
concentration account at FNBC.
LTL summarized the transfers of money to be made through
FNBC's accounts for FNBC officials in Canada. At the end of each
day, LTL or its subsidiaries redeposited enough money in the FNBC
CCMP accounts to cover any overdrafts resulting from transfers.
LII had a separate CCMP with its subsidiaries.
G. The Advances at Issue
1. LIL, LIIBV, and LTL
In the years in issue, LIIBV's primary activity was to
receive funds from LIL and transfer them to petitioners,
generally on the same or next day. LIIBV advanced funds only to
Laidlaw affiliates in the years in issue. LIIBV's funds came
almost exclusively from LIL and from petitioners' payments to
LIIBV.
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