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or business purpose and were only part of the transactions for
Federal tax purposes.
H. Cedilla Invest. "Dard Systems Transactions"
On December 22, 1986, Cedilla Invest. purportedly purchased
certain IBM-manufactured computer equipment from Dard Systems,
Inc. (Dard), for $3,615,100. Prior thereto, on June 29, 1981,
Funding Systems International had sold this equipment to
Equitable Leasing Co., and on the same date, Equitable Leasing
Co. had leased the equipment back to Funding Systems
International. Equitable Leasing Co., on September 30, 1981,
sold the equipment to Dard, and thereafter Dard sold the
equipment to Cedilla Invest. on December 22, 1986, subject to
several end user leases with various entities in England as well
as the lease encumbering the equipment in favor of Funding
Systems International.
The stated purchase price of $3,615,100 was, according to
the terms of the purchase agreement, to be paid by Cedilla
Invest. to Dard as follows: $18,000 cash payable at the time of
the execution of the agreement; a short-term promissory note
payable on May 15, 1987, in the amount of $198,000; and a long-
term, "limited recourse" promissory note in the amount of
$3,399,100.
Under the terms of the "limited recourse promissory note",
Cedilla Invest. was personally liable only during the times and
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