Hubert Enterprises, Inc. and Subsidiaries, et al. - Page 35

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          approximately 2-1/2 years after HEI’s first transfer to ALSL and            
          did so only on account of ALD’s claimed liquidation.  Moreover,             
          notwithstanding this lack of repayments throughout the referenced           
          2-1/2-year period, HEI continued to transfer funds to ALSL                  
          without any schedule for repayment.  HEI even transferred a total           
          of $95,000 to ALSL in 1997 even though in December 1996 HEI                 
          decided to stop funding the Seasons of Sarasota project and ALSL            
          treated the “debt” as discharged on its Federal income tax return           
          for 1996.                                                                   
               Petitioners ask the Court to conclude that the issuance of             
          the ALSL note as a demand note strongly supports a finding of               
          debt because the obligeee of a demand note, unlike an equity                
          holder, may at any time demand repayment.  We decline to reach              
          such a conclusion.  As noted by the Court of Appeals for the                
          Eleventh Circuit, “an unsecured note due on demand with no                  
          specific maturity date, and no payments is insufficient to                  
          evidence a genuine debt.”  Stinnett’s Pontiac Serv., Inc. v.                
          Commissioner, 730 F.2d at 638; cf. Bayer Corp. v. Mascotech, Inc.           
          (In re Autostyle Plastics, Inc.), supra at 750 (“use of demand              
          notes along with a fixed rate of interest and interest payments             
          is more indicative of debt than equity” (Emphasis added.)).                 
          Repayment of the ALSL note was unsecured, HEI never prepared a              
          written repayment schedule as to the transfers, and ALSL never              
          had assets available to pay all, or even a significant part, of             






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