-241-
LaStaiti v. Commissioner, T.C. Memo. 1980-547. We examine only
facts and circumstances that were known or reasonably could have
been known at the time of the asserted worthlessness. See
Halliburton Co. v. Commissioner, 93 T.C. 758, 774 (1989), affd.
946 F.2d 395 (5th Cir. 1991).
For a debt to be entirely worthless, it must have lost its
“‘last vestige of value.’” Bodzy v. Commissioner, 321 F.2d 331,
335 (5th Cir. 1963) (quoting Miami Beach Bay Shore Co. v.
Commissioner, 136 F.2d 408, 409 (5th Cir. 1943), revg. and
remanding an unpublished decision of this Court), revg. on
another issue T.C. Memo. 1962-40; Am. Offshore, Inc. v.
Commissioner, 97 T.C. 579, 593 (1991); see also Higginbotham-
Bailey-Logan Co. v. Commissioner, 8 B.T.A. 566, 578-579 (1927).
A debt is not wholly worthless if the collateral securing it has
value. Jessup v. Commissioner, T.C. Memo. 1977-289.
As discussed in detail supra, we have found that the EBD
film rights, the Carolco securities, and the NOLs in SMHC had no
material or consequential value as of December 11, 1996, when
Generale Bank and CLIS “contributed” the SMHC receivables to SMP.
Petitioner argues, however, that these assets had some value,
even if speculative, and therefore the receivables were not
entirely worthless.
Although the term “worthless” in section 166 has been
interpreted strictly to include only debts that are “wholly
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