Flint Industries, Inc. and Subsidiaries - Page 13




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          occurred while the GmbH was overindebted or insolvent, or within            
          10 days prior to the GmbH’s becoming overindebted or insolvent,             
          and the other party to the transaction knew of such                         
          overindebtedness or insolvency, and (2) any transaction by the              
          GmbH, regardless of when such transaction occurred, the purpose             
          or intent of which was to prejudice creditors, if such                      
          transaction occurred at a time reasonably connected to a                    
          subsequent bankruptcy.                                                      
               In order to avoid bankruptcy under German law, the owners of           
          a GmbH are required to endorse a plan aimed at improving the                
          GmbH’s financial stability as determined under applicable German            
          accounting principles.                                                      
               D.  Petitioner’s Evaluation of G�nther’s Financial                     
               Condition                                                              
               Faced with G�nther’s catastrophic net loss for FYE April 30,           
          1992, petitioner’s management considered its options with respect           
          to G�nther.  It ascertained the fair market value of G�nther’s              
          assets, looking for any asset whose fair market value so exceeded           
          its book value that the asset might be converted into cash to pay           
          down bank loans Flint had guaranteed.  It attempted to identify             
          any liabilities not reflected on G�nther’s books that could arise           
          if G�nther were sold or liquidated or if G�nther were forced into           
          bankruptcy.  Most importantly, petitioner analyzed available                
          options in order to ascertain which option would result in the              
          smallest financial loss to petitioner from G�nther’s financial              






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