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by the end of 1981.6 The consolidated HGI note was
unsubordinated and unsecured, was dated as of January 1, 1980,
and was payable on August 1, 1980, or upon demand thereafter.
The stated interest rate on the consolidated HGI note was never
paid but instead was accrued by Finance as an additional asset.
6. Operations of Finance
The managing directors of Finance included a Netherlands
Antilles trust company and various officers of City. Finance had
no employees during the period 1977 through 1985. During the
years at issue, Finance held annual meetings of its shareholders
and prepared annual financial reports. Finance also filed annual
tax returns with the Netherlands Antilles tax authorities. City
paid the general and administrative expenses of operating
Finance, including the taxes owed by Finance to the Netherlands
Antilles.
In general, when an interest payment on the 8-3/4-percent
notes or the FR notes was due and payable by Finance, City would
wire the amount of the interest payment into Finance’s bank
account, which would then be paid out to the fiscal agent in
charge of paying the note holders on the same day. The remaining
interest due to Finance from City under the terms of the 1977 and
6 Petitioner has not been able to establish the exact date
of execution of the consolidated HGI note. The earliest document
in the record mentioning the consolidated HGI note is the 1981
annual report of HGI.
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