Claymont Investments, Inc., As Successor in Interest to New CCI, Inc. and Subsidiaries - Page 21

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          funds from CIHI.  On June 28, 1996, CIC and CIHI signed an                  
          assumption agreement in which CIC agreed to transfer $49,784,881            
          to CIHI in exchange for CIHI’s assuming all of its obligations              
          relating to the note.  Subsequent to the agreement, CIC                     
          transferred the $49,784,881 to CIHI, and CIHI began making                  
          payments pursuant to the terms of the agreement.  Although the              
          note provided that the principal and accrued interest were not              
          due until October 7, 1998, CIHI paid the note in full on November           
          17, 1997.  From June 28, 1996, through November 17, 1997, CIHI              
          performed all of its duties pursuant to the terms of the                    
          agreement.  Had CIHI not performed all of its duties, CIC had a             
          legal right to enforce the terms of the agreement.  Furthermore,            
          petitioners were aware that by delaying repayment of the note               
          they could take advantage of the favorable fluctuations in the              
          currency exchange rates (i.e., the repayment amount could                   
          continue to decrease if the dollar strengthened relative to the             
          pound).  Petitioners raised, and respondent failed to adequately            
          refute, these factors.  Accordingly, we conclude that the                   
          contractual terms were consistent with the economic substance of            
          the transaction.                                                            
               Finally, because the transaction had economic substance,               
          section 1.482-1(f), Income Tax Regs., prohibits respondent from             
          restructuring the terms as if his alternative had been adopted by           

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