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Dart’s loan obligations to HL or HS. In the end, the parties
would have advanced no further nor taken any steps back from
where they had started. In any event, the minority shareholders
of Dart were petitioners’ children and trusts for the benefit of
those children. We cannot agree that the children or the
trustees would have made demand for repayment premature to Mr.
Oren’s own wishes, especially considering other circumstances
which demonstrate that Mr. Oren had exclusive control of all
matters within the Dart companies: Mr. Oren’s ownership of all
voting stock in the Dart companies, his orchestration of the loan
transactions in 1993, 1994, and 1995, his exclusive control over
repayment in 1996, his initiation of the First Bank credit
amendments in 1993, and the distributions that occurred in 1996
from Dart to its shareholders.
Petitioners also argue that the loan transactions had
economic substance because of “the need to finance HL and HS” and
strengthen the financial statements of the companies. However,
the loan transactions themselves did not result in an infusion of
finances into HL and HS given that the loan proceeds were
immediately returned to Dart. Further, petitioners have not
presented any credible evidence to substantiate the claim that
the balance sheets of the Dart companies were strengthened as a
result of the loans or that Mr. Oren adopted the form of the loan
transactions in order to accomplish such a result. Petitioners’
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