- 34 -
to be involved in such an accident, the circle of loan payments
might be broken, and Mr. Oren might be forced to repay Dart with
his own resources.
After examining all the facts and circumstances, we cannot
conclude that there was a realistic possibility that Mr. Oren
would be required to repay the Dart loan with his own personal
resources. There were significant cashflow and assets available
in Dart, HL, and HS from which to satisfy any potential claims of
up to $2 million without upsetting the circular offsets created
by the loan transactions. And, claims of up to $34 million would
be covered by a general insurance policy owned by the Dart
companies.23 With respect to claims in excess of $34 million;
i.e., claims that might break the circular arrangement with the
introduction of outside creditors, petitioners have produced no
evidence of the frequency of such claims except the self-serving
and speculative testimony of Mr. Oren. Indeed, at trial, Mr.
Oren could testify only to one accident, an accident in which a
verdict of $7 million was delivered. This figure in no way
approaches $34 million. We cannot agree that there was a
22(...continued)
have been out of the question.
23The Dart Companies owned an insurance policy which
provided general liability coverage. The policy provided that
the Dart Companies were self-insured for the first $2 million of
any claim but were covered for claims of up to $34 million. For
claims over $34 million, the Dart Companies were self-insured.
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