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fide, we must look to the substance of the transaction, not the
formalities attending it. Muserlian v. Commissioner, 932 F.2d
109, 113 (2d Cir. 1991), affg. T.C. Memo. 1989-493.
In determining whether a debt is bona fide, all the facts
and circumstances are considered, including: (1) Whether a note
or other evidence of indebtedness exists; (2) whether interest is
charged; (3) whether there is a fixed schedule for repayments;
(4) whether any security or collateral is requested; (5) whether
there is any written loan agreement; (6) whether a demand for
repayment has been made; (7) whether the parties’ records, if
any, reflect the transaction as a loan; (8) whether any
repayments have been made; and (9) whether the borrower was
solvent at the time of the loan. See, e.g., Goldstein v.
Commissioner, T.C. Memo. 1980-273 (and cases cited therein).
During the course of its relationship with MGM, the Credit
Lyonnais group had lent or advanced upwards of $2 billion to the
MGM companies. Before October 10, 1996, there was a realistic
possibility that the Credit Lyonnais group might recover a
substantial portion, or perhaps the entire amount, of their loans
and advances to the MGM companies.172 This possibility hinged on
172 Alan Cole Ford, a member of MGM’s management team,
testified that the Credit Lyonnais group had the hope and
expectation of realizing $2 billion on the sale of the MGM
operating company. In considering the disposition of MGM, the
Credit Lyonnais group had prepared a document entitled “Project
Lion, Presentation to Consortium de Realisation”, which recorded
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