Hubert Enterprises, Inc. and Subsidiaries, et al. - Page 37

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          interest stated in the ALSL note.  A transferor of funds who does           
          not insist on reasonable interest payments as to the use of the             
          funds may not be a bona fide lender.  See Stinnett’s Pontiac                
          Serv., Inc. v. Commissioner, supra at 640.                                  
               ALSL never paid any interest to HEI as to the transferred              
          funds and made but a single, nominal payment as to the principal            
          of those funds.  Petitioners assert that payments were not made             
          because neither principal nor interest was ever due under the               
          terms of the ALSL note.  We consider this assertion unavailing.             
          Indeed, HEI did not even report that accrued interest was owing             
          on the ALSL note until more than 18 months after the first                  
          transfer of funds.                                                          
               This factor weighs toward a finding that the transfers did             
          not create bona fide debt.                                                  
                    4.  Source of Repayment                                           
               Repayment that depends solely upon the success of the                  
          transferee’s business weighs against a finding of bona fide debt.           
          Repayment that does not depend on earnings weighs toward a                  
          finding of debt.  See Bayer Corp. v. Mascotech, Inc. (In re                 
          Autostyle Plastics, Inc.), supra at 751; Roth Steel Tube Co. v.             
          Commissioner 800 F.2d at 632; Lane v. United States, 742 F.2d               
          1311, 1314 (11th Cir. 1984).  “An expectation of repayment solely           
          from * * * earnings is not indicative of bona fide debt                     
          regardless of its reasonableness.”  Roth Steel Tube Co. v.                  






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