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the early part of 1990. From March 1990 through the end of 1992,
LFI billed BCC for every night petitioner, a member of his
family, one of his business acquaintances, or one of his friends
stayed at Granot Loma.
LFI did not bill any of the guests directly; all invoices
were sent either to BCC, BDC, or BAC. In fact, almost none of
the guests were even aware that LFI was charging anyone for their
stay. Even Mrs. Baldwin was not aware of LFI’s invoicing system
until the divorce proceedings commenced.
No rooms at Granot Loma were ever held out to the public for
rent, and no rooms were ever rented to the public.7 No leases or
rental contracts for the rental of Granot Loma were executed by
LFI, any guest, or any of petitioner’s other companies. Only
petitioner’s relatives, friends, business acquaintances, and
other invited guests used Granot Loma. In fact, petitioners
decided not to operate Granot Loma as a commercial lodge because
they did not want to curtail their use of the facility or to open
it up for use by guests they had not invited personally.
When Mr. Ketter set the rental rates for Granot Loma, he did
not estimate an occupancy rate, project the frequency of use, or
7In September 1989, Worth Brown, a resort manager, visited
Granot Loma for the purpose of determining whether Granot Loma
could be operated as a luxury resort. He concluded that it was
possible. Petitioners, however, decided not to commence a bed
and breakfast or other business open to the public because they
did not want to share the lodge with outsiders. Granot Loma was
never operated as a commercial lodge.
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