- 13 -
apply such factors (“traditional debt-equity principles”) to the
situation before us in order to conclude that petitioner
contributed almost $2 million to the capital of the corporation.
Specifically, petitioners ask us to find that (1) the
corporation had no capacity to borrow the sums here received from
the bank, (2) the bank relied on the guarantors’ credit-
worthiness and, in fact, lent such sums to the guarantors,
4(...continued)
(1) the names given to the certificates evidencing the
indebtedness;
(2) the presence or absence of a fixed maturity date;
(3) the source of payments;
(4) the right to enforce payment of principal and
interest;
(5) participation in management flowing as a result;
(6) the status of the contribution in relation to
regular corporate creditors;
(7) the intent of the parties;
(8) ‘thin’ or adequate capitalization;
(9) identity of interest between creditor and
stockholder;
(10) source of interest payment;
(11) the ability of the corporation to obtain loans
from outside lending institutions;
(12) the extent to which the advance was used to
acquire capital assets; and
(13) the failure of the debtor to repay on the due date
or to seek a postponement.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011