Hubert Enterprises, Inc. and Subsidiaries, et al. - Page 42

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               This factor weighs toward a finding that the transfers did             
          not create bona fide debt.                                                  
                    9.  Subordination                                                 
               Subordination of purported debt to the claims of other                 
          creditors weighs against a finding of bona fide debt.  See Roth             
          Steel Tube Co. v. Commissioner, 800 F.2d at 631-632; Stinnett’s             
          Pontiac Serv., Inc. v. Commissioner, supra at 639; Raymond v.               
          United States, 511 F.2d at 191; Austin Village, Inc. v. United              
          States, supra at 745.                                                       
               ALSL has never had any creditors.  Given that the transfers            
          were unsecured, however, their right to repayment would have been           
          subordinate to the interests of any secured creditors.                      
               This factor is either inapplicable or does not support a               
          finding that the transfers created bona fide debt.                          
                    10.  Use of Funds                                                 
               A transfer of funds to meet the transferee’s daily business            
          needs weighs toward a finding of debt.  A transfer of funds to              
          purchase capital assets weighs against a finding of bona fide               
          debt.  See Roth Steel Tube Co. v. Commissioner, supra at 632;               
          Stinnett’s Pontiac Serv., Inc. v. Commissioner, supra at 640;               
          Raymond v. United States, supra at 191.                                     
               The transfers were not used to pay ALSL’s daily operating              
          expenses because ALSL had no operating expenses.  Although the              
          transfers also were not used to acquire tangible capital assets,            






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