-39-
transferred funds and minuscule in comparison to the cost of the
Seasons of Sarasota project. As to that project, ALD agreed to
pay $3 million for land and had agreed to pay construction-
related costs potentially totaling millions of dollars more. For
its own equity capitalization, ALD had only $100,000 from its
limited partner Culpepper.
This factor weighs toward a finding that the transfers did
not create bona fide debt.
6. Identity of Interest
Transfers made in proportion to ownership interests weigh
against a finding of bona fide debt. A sharply disproportionate
ratio between an ownership interest and the debt owing to the
transferor by the transferee generally weighs toward a finding of
debt. See Bayer Corp. v. Mascotech, Inc. (In re Autostyle
Plastics, Inc.), 269 F.3d at 751; Stinnett’s Pontiac Serv., Inc.
v. Commissioner, 730 F.2d at 630; Estate of Mixon v. United
States, 464 F.2d at 409.
HEI was not an owner of ALSL. HFT’s controlling settlors
and trustees were. In fact, the only portion of ALSL not owned
by those individuals was the 5-percent interest owned by
Ollinger, an HEI vice president, who never made any contribution
of capital to ALSL in return for his interest. The individuals
who controlled HEI effectively caused HEI to fund their
investment in ALSL.
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