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* Advances to Transit; ** Advances to LWSI; + Included in
$9,588,797 transfer on May 28 to 30, 1987.
An example of how petitioners used an interest reinvestment
loan is the transaction on May 28 to 30, 1986, in which LIIBV
transferred $988,797 to U.S. subsidiaries and U.S. subsidiaries
claimed interest payments totaling $988,797.
May 28 to May 30, 1986, Transfers
U.S. Subsidiaries to LIIBV LIIBV to U.S. Subsidiaries
LWSI $179,740 Transit $8,600,000
Transit 809,057 Transit reinvest 988,797
Total 988,797 Total 9,588,797
Steps for the May 28 to May 30, 1986, Transfers
1. LTL received $8.6 million from TDB on May 28.
2. LTL transferred $8.6 million to LIL on May 28.
3. LWSI transferred $179,740 to LIIBV on May 29.
4. Transit transferred $809,057 to LIIBV on May 29.
5. LIIBV transferred $9,588,797 to Transit on May 29. This
caused an $8,596,000 overdraft in LIIBV's ABN Bank NY
account.
6. LIIBV was credited with $8.6 million from LIL on May 30.
8. LTI's Commercial Loans
During its taxable years ending from August 31, 1989, to
August 31, 1995, LTI frequently borrowed funds from commercial
lenders to help make petitioners' quarterly interest payments and
semiannual principal payments to LIIBV.
H. Petitioners' Financial Condition
1. Capitalization of Petitioners in the Years in Issue
The transportation and waste services industries are
capital-intensive. Petitioners constantly needed to buy trucks
and buses and improve landfill sites. Petitioners could not
eliminate or significantly reduce their capital spending for a
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