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Petitioners presented no evidence to substantiate the
fair market value of any of the subject properties as of
February 1, 1985. Petitioners argue that the 16 promissory
notes are, in fact, "unsecured debt" and are bona fide
indebtedness without regard to the value of the property.
Initially, petitioners argued that "the promissory notes
were not recorded until after the bankruptcy filing", and
thus the notes had "no substance in the eyes of the
bankruptcy court." On the basis of that premise,
petitioners argued: "respondent should not be allowed to
rely upon defective documents to assert that those notes
represented secured debt". Petitioners further argued
that the notes should be treated as unsecured debt
"indistinguishable from the unsecured advances which they
replaced."
In their reply brief, petitioners withdrew the factual
assertion that the 16 promissory notes replaced unsecured
advances made by EPIC. They continue to take the position
that the validity of the notes should be determined without
regard to the value of the 16 properties in 1985 for either
of two reasons. First, petitioners argue that the notes
were related to "an $80,000 line of credit from Community"
that is described in respondent's brief as "a nonrecourse
line of credit with Community [CSL] totalling $80,000
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