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As discussed next, we hold that (a) it was not necessary for
the estate to borrow funds to pay Bergreen or Davis because their
compensation was an expense of HG and was not an administration
expense of the estate, (b) it was not necessary for the estate to
borrow funds to pay administration expenses of $816,175, (c) it
was necessary for the estate to borrow funds to pay Federal and
state estate taxes, and (d) it was not necessary for the estate
to borrow funds for a term extending beyond January 31, 2004,
which is the date the estate was due to receive repayment of the
$143 million in notes.
2. Whether Compensation Paid to Bergreen and Davis Is an
Estate Expense
a. The Relationship Between the Estate and HG
The estate contends that expenses incurred relating to the
GIC assets after the estate transferred those assets to HG and
its subsidiaries in the restructuring are estate expenses. The
estate points out that, after the restructuring, (i) it continued
to exist and Bergreen and Moody retained the same control over
the sale of the GIC assets as they had before the restructuring;
(ii) the Gilman assets were not transferred to the foundation;
and (iii) the HG agreement gave exclusive management and control
over the Gilman assets to Bergreen and Moody, who were also the
executors of the estate. The estate contends that, by virtue of
10(...continued)
and (4) the estate does not contend that sec. 7491 applies.
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