Indeck Energy Services, Inc., and Subsidiaries - Page 45




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          of its position.  However, those cases are distinguishable in a             
          key respect.  In both, there was agreement between the purported            
          debtor and creditor as to the amount of the obligation and its              
          due date, as of the time the purported interest began to accrue.            
          Here, the amount of Indeck’s obligation, and its due date, were             
          disputed during the period that the bulk of the claimed interest            
          purportedly accrued.                                                        
               In Halle, the Court of Appeals for the Fourth Circuit,                 
          reversing our opinion in Kingstowne,20 held that an agreement for           
          the purchase of stock at a specified price and settlement date              
          created indebtedness on the part of the purchaser such that the             
          purchaser’s payments to defer settlement beyond the agreed-upon             
          settlement date constituted interest for purposes of section                
          163(a) rather than additional purchase price.  Indeck likens the            
          disputed $4,856,922 portion of the settlement payment here to the           
          payments made by the purchaser in Halle to defer the settlement             
          date of the stock purchase-–that is, as a payment for the                   
          forbearance of money owed.  But a critical distinction exists.              


               20 Because Halle v. Commissioner, 83 F.3d 649 (4th Cir.                
          1996), revg. on other grounds Kingstowne v. Commissioner, T.C.              
          Memo. 1994-630, is fully distinguishable from the facts of this             
          case and is not inconsistent with our holding herein that Indeck            
          has not established indebtedness for purposes of sec. 163(a), we            
          have no occasion to reconsider our holding in Kingstowne that the           
          purchase agreement at issue in that case created merely an option           
          to purchase rather than an indebtedness.  See Golsen v.                     
          Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985 (10th Cir.             
          1971).                                                                      





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