- 39 -
F.2d 731 (8th Cir. 1973); Trinco Indus., Inc. v. Commissioner, 22
T.C. 959, 965 (1954).
Also, it does not appear that the unpaid $33 million Phemex
loan was sufficient to cause Mr. Rendall to abandon all hope of
recovery on the $2 million loan. In the amended disclosure
statement, Solv-Ex represented that it was prepared to assert
offsetting claims against Phemex and its affiliates, and, as of
December 31, 1997, Phemex had not filed a proof of claim. As
noted supra, Phemex did not file a proof of claim by the January
31, 1998, deadline and, therefore, waived its claim entirely.
Assuming arguendo that Solv-Ex was technically insolvent as
of December 31, 1997, that insolvency was not an identifiable
event indicating the worthlessness of the $2 million loan as of
December 31, 1997.
5. Whether Solv-Ex’s Technology Was Without Value
As discussed in section IV. B.2., supra, the evidence
indicates that the retained technology had substantial potential
value as of December 31, 1997. Therefore, it cannot be
considered worthless as of that date.
6. Absence of Prior Earnings or a Viable Business Plan for
the Future
a. Absence of Prior Earnings
A history of continuous operating losses, like insolvency,
does not represent an identifiable event indicating the
worthlessness of the loss corporation’s indebtedness. As in the
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