-33-
demand but that the obligee never demanded payments supports a
strong inference that the obligee never intended to compel the
obligor to repay the notes). Although both HEI and ALSL posted
in their records that the transfers were loans, those postings
provide little if any support for a finding of bona fide debt.
Roth Steel Tube Co. v. Commissioner, 800 F.2d at 631 (citing
Raymond v. United States, 511 F.2d 185, 191 (6th Cir. 1975)).
Petitioners argue that HEI asserted its rights as a lender
by receiving all of the existing capital of ALSL upon its demise.
According to petitioners, had the transfers not been debt, then a
portion of that capital would have gone to Stethem and Thomas,
who together contributed $250,000 of capital to ALSL. We
consider this argument unpersuasive. We find nothing in the
record to support petitioners’ claim that HEI asserted its rights
as a lender by receiving all of the existing capital of ALSL upon
its claimed demise.7 We also find nothing in the record to
support petitioners’ claim that Stethem and Thomas failed to
receive anything of value as to their capital contributions.
Stethem and Thomas were fixtures in most of the financial
ventures of the Hubert family and their companies. In addition
7 Nor do we find that the business of either ALSL or ALD
ceased in 1996 or 1997, as petitioners claim. Indeed, in and
after December 1996, HEI made to ALSL nine transfers totaling
$145,000, and ALSL made to ALD six transfers totaling
$157,197.66. HEI also did not receive the reported liquidation
proceeds until July 14, 1997.
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