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166.1 After concessions,2 we must determine whether $10 million
of an $18 million debt became worthless in 1995.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the accompanying exhibits are
incorporated by this reference. Petitioner’s principal place of
business was Northlake, Illinois, at the time it filed the
petition.
The issue in this case arose as a management group attempted
to respond quickly to a changing business environment in the
bottling industry. As background, we explain the bottling
industry in general and the economic environment in which it
existed.
Bottling Industry
The soft drink bottling business around 1986 consisted of
the "big three." There were two well-known titans, Coke and
Pepsi, and a third quasi-independent network that encompassed all
other beverages. Independent beverage labels at that time
included drinks like Squirt, Dr. Pepper, 7-Up, Burns, and certain
"new age" drinks. The independent bottling network was also
1All section references are to the Internal Revenue Code in
effect for the year at issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
2The parties have resolved all other issues raised in the
deficiency notice and the petition.
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