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"Nonrecourse Installment" promissory note in favor of O.P.M.
Therefore, Cedilla Invest. had no recourse liability for the
debt. See Rose v. Commissioner, supra. Moreover, the note
contained a provision for deferral and set-off of payments to
O.P.M. by Cedilla Invest. to the extent of and for the amount of
rent that was not paid by O.P.M. This deferral extended to
January 1, 1986. There was little likelihood Cedilla Invest.
would be called upon to satisfy this obligation.
The agreement with O.P.M. included a substitution agreement
permitting O.P.M. to substitute and exchange certain equipment
for that currently being leased. This indicates a retention by
the lessee of control over the property. This fact negates any
claim that IRA obtained ownership of the property.
The sham nature of the transaction is shown by the manner in
which it was purportedly negotiated. Schott was asked to be a
director of IRA, yet knew little, if anything, about its
operations. She executed documents on behalf of Cedilla Invest.
without knowing who prepared the documents or the purpose for
them. Schott did not have an equity interest in the company,
despite the fact that IRA's records indicated at one time that
she was an owner thereof. Mallin executed a document on behalf
of Cedilla Invest. as a director after he had been asked to
become a director by Kanter. Mallin received a commission for
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