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was familiar with. It looked like a good business opportunity to
me, because I was well secured. And I was able to make a fee.”
The minutes of the board of directors of IBC and the
resolutions that relate to the authorization of guaranty fees to
petitioner also show a lack of business initiative, and indeed
reluctance, on the part of petitioner to make the guaranties. If
anything, those minutes, the resolutions, and petitioner’s
testimony indicate to us that petitioner made the guaranties to
protect or enhance his investment interest in IBC and not as a
part of a lending or financing trade or business.
Further, it is not altogether clear that there was any
agreement or understanding regarding guaranty fees in place
before or contemporaneous with petitioner’s making of the various
guaranties. Respondent suggests that the lack of assurance of
receiving fees from IBC is inconsistent with petitioner’s claim
of a trade or business of making guaranties. Respondent argues
that the fees were not approved until the passing of the formal
resolutions, that petitioner guaranteed debts before “his
entitlement to the related guarantee fee became an approved
fact”, and that his guaranties “can only be construed as
gratuitous acts which he intended to protect and/or benefit his
then existing interests in IBC”. Petitioner testified that the
board’s resolutions authorizing the fees were made after he had
guaranteed the various loans; however, he also testified that the
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