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3. Sale of Solv-Ex’s Canadian Operating Assets and Leases
Although Solv-Ex’s forced sale to Koch of a 78-percent
interest in its Canadian operating assets and leases was
certainly a setback for the company, for the reasons discussed in
the prior section, that sale (to which Solv-Ex was committed as
of December 31, 1997) did not eliminate the realistic hope that
Solv-Ex would be able to recommence operations in the future and
become profitable.
In fact, the cash raised by that sale (and by Solv-Ex’s sale
of the remaining 12-percent interest in its Canadian operating
assets and leases) helped enable Solv-Ex to discharge
substantially all of its non-subordinate, non-debenture debts,
thereby enhancing the prospects for its eventual recovery.
Moreover, that is true whether the sale was at a gain, at break-
even, or at a loss as petitioners allege.
We find that the anticipated sale of Solv-Ex’s Canadian
operating assets and leases was not an identifiable event
indicating the worthlessness of the $2 million loan as of
December 31, 1997.
4. Insolvency
As noted supra, there are no financial statements in
evidence that reflect Solv-Ex’s financial position as of December
31, 1997. The only evidence indicating Solv-Ex’s insolvency as
of that date is Mr. Ciotti’s unsubstantiated trial testimony that
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