T.C. Su m m ary Op i n i o n 2 0 1 7 -9

UNITED STATES TAX COURT

W ILLIAM H. TINSLEY AND AM ARYLLIS E. TINSLEY, Pet i ti o ners v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 6 6 9 8-1 4S. Fi l edFeb ru ary 2 8 , 2 0 1 7
. W i l l i am H. Ti ns l ey

& Am ary l l i s E. Ti n s l ey , p ro s es e. Ho race Cru m

p , Th o m as Al an Fri d ay , an dEdwi n B. Cl ev erd o n , fo r
res p o n d en t.

SUM M ARY OPINION
J ACOBS, J u d ge: Th i s cas e was h eard p u rs u an tt o th e p ro v i s i o n s o f s ect i o n 7 4 6 3 o f t h e In t ern al Rev en u e Co d e i n effect wh en th e p et i t i o n was fi l ed
. Pu rs u an t t o s ect io n 7 4 6 3 (b ), t h e d eci s i o n t o b e en t ered i s n ot rev i ewab l e b y an y o t h er co u rt , an d t h is o p i n i o n s h al l n o tb e t reat ed as p reced en tfo r an y o t h er cas e.- 2
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Th i s cas e was s ub m i t t edt o th e Co u rtfu l l y s t ip u l at edu n d er Ru l e 1 2 2 . Th e
s o l e i s su e i n th i s cas e i s wh et h er M r. Ti n s l ey h ada s u ffi ci en tb as is i n Co m m an d Co m p u t ers o f W es t Fl o ri d a, In c. (Co m m an dCo m

p u t ers ), as o f Decem

ber 3 1 , 2 0 1 0 , o n acco u nt o f h i s o bl i g at i o n wi t h res pect t o t he Co m m an dCo m

p u t ers ’ d eb t , t o p erm i tp et i t i o n ers t o d edu ct$ 1 1 0 ,4 8 0, wh i ch rep res en t ed a p o rt io n o f M r. Ti n s l ey ’ s d i s t ri b u t i v e s h are o f Co m m an dCo m

p u ters ’ cu rren tan ds u s p en d ed (2 0 0 8) fl o wt h ro u gh l o ss es , o n t h ei r 2 0 1 0 Fo rm 1 0 4 0 , U.S. In d i v i du al In co m e Tax Ret u rn . Un l es s o t h erwi s e i n di cat ed , al l s ect i o n referen ces are t o th e In t ern al Rev en u e Co de, as am en d ed , an dal l Ru l e referen ces are t o th e Tax Co u rtRu l es o f Pract i ce an d Pro cedu re. Back gro u n d Atth e t im e t h ey

fi l edth ei r p et i t i o n, p et i t io n ers res i d edi n Fl o ri d a. Atal l rel ev an t t i m es M r. Ti n s l ey was th e s o l e s h areh ol d er o f Co m m an d Co m

p u t ers , a
co rp o rat i o n en gag ed i n th e b us i n es s o f co m p ut er d es i gn an ds erv i ce. Co m m an d Co m p u t ers el ect edS co rp orat i o n s t atu s effect i v e M arch 2 2 , 2 00 6
. On Ap ri l 5 , 2 0 0 6 , Co m

m an dCo m

p u t ers b o rro wed$ 1 50 ,0 0 0 fro m Fi rs tCi t y Ban k o f Fl ori d a (Ban k ). M r. Ti n s l ey g u aran t eedth e l oan . Co m m an dCo m

p u t ers
was l i qu id at ed i n Au gu s t 2 0 1 0 . Atth e t im e o f l i qu i d at i o n Co m m an dCo m

p u t ers
o wedth e Ban k$ 1 1 0 , 4 8 0
.- 3
-

Co m m an dCo m

p u t ers t im el y

fi l edi t s 2 0 1 0 Fo rm

1 1 2 0 S, U.S. In co m e Tax Ret u rn fo r an S Co rp o rat i o n, o n wh i ch i t rep o rt edan o rd i n ary b u si nes s l o ss o f $ 1 3 6 ,2 4 3 . M r. Ti n s l ey

h adn o s t o cko r d eb t b as i s i n Co m m an d Co m

p ut ers wh en i t
was l i qu id at ed
. Aft er Co m

m an dCo m

p u t ers was l iqu i d at ed , th e o p erat i o n s o f t he b u s i n es s
co n ti n u edu n d er i t s fo rm er n am e. Th e l eg al fo rm o f t h e b u s in es s was n o ti n d i cat ed i n the reco rd
. Co m m an dCo m

p u t ers ’ 2 0 0 6 l oan wi t h the Ban kwas ren ewedo n M arch 1 6 , 2 0 1 1 . Co m

m an dCo m

p u t ers o f W es tFl o ri d a, In c., rem ai n edth e n am edb o rro wer
o f t h e ren ewedl o an ev en th o u gh i tn o l o n g er l eg al l y ex i st ed . M r. Ti n s l ey

s i g n ed t h e ren ewal n o t e as p res id en to f Co m m an dCo m

p u ters an d was th e g u aran to r o f t h e l o an . Th e am o u n to f t h e ren ewedl o an was $ 1 04 ,7 7 1 .8 6. At tach edt o th e
ren ewal n o t e was t h e o ri g i n al p ro m i s s o ry n o t e, d at edAp ri l 5 , 2 0 0 6 , o n wh i ch a h an dwri t t en n o t at i o n s tat ed : “ Sec b y --In v en t ory & Equ i p m en t ”. Th e ren ewal n o t e p ro v id edth ata fi nal b al l o o n p aym en twas du e o n M arch 1 6 , 2 0 1 6 . M r. Ti ns l ey
m ad e al l l o an p aym en t s fo l l o wi n g th e l iqu id at i o n o f Co m m an dCo m

p u t ers , b u tth e
reco rdd o es n o ti n d i cat e wh et h er h e m ad e t he p aym en t s fro m h i s p ers o n al fu n d s o r
m erel y s i g n ed ch eck s drawn o n th e acco u n to f Co m m an d Co m

pu t ers .- 4
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Res p o n d en tex am i n edp et i t i o n ers ’ 2 01 0 t ax retu rnan d d i s al lo wed t h e $ 1 1 0 ,4 8 0 l o s s d edu ct i o n rel at edt o Co m m an dCo m

pu t ers . OnJ an u ary

3 , 2 0 1 4 , res p o n d en t m ai l edp et i t i o n ers a n o t i ce o f d efi ci en cy . OnFo rm 8 8 6-A, Ex p l an at i o n
o f It em s , at t ach edt o t h e n o t i ce o f d efi ci en cy , res p o n den tex p l ai n ed : Si n ce y o u r d i s tri b u ti v e s h are o f t h e S Co rp o rat i o n Co m m an d Co m p u t ers o f W es t Fl o ri d a, In c. l o s s i s l i m i tedt o th e ex t en to f y o ur ad ju st edb as i s , we h av e d i s al l o wedthe am o u nti n ex ces s o f y o u r b as i s, y o u r l o s s fl o w-t h ro u g h fro m y o u r S Co rp o rat i on i s l i m i t ed t o y o u r b as i s . Si nce y o ud idn o tes t ab l i s h th atth e am o u n ts h o wn was (a) a l os s , an d (b ) s us t ai nedb y y o u , i t i s n o td edu ct i b l e. Th e l os s (es ) y ou cl ai m edcan n o tb e al l o wedb ecau s e i t h as n o t b een es t ab l i s h edth at y o uare at ri s k wi t h i n th e m ean i n g o f s ect i o n 4 65 o f t h e In t ern al Rev en u e Co de i n t h e am o u n to f t h e cl ai m edl o s s(es ). Di s cu ss i o n As a g en eral ru l e, the Co m m i s s i on er’ s d et erm i nat i o n s i n the n o t i ce o f d efi ci en cy

are p res u m edco rrect , an dth e t ax p ay er b ears th e b u rd en o f p ro v i n g
erro r. Ru l e 1 4 2 (a); W el ch v. Hel v eri n g , 2 9 0 U.S. 1 1 1 , 1 1 5 (1 9 33 ). Dedu ct i o n s
are a m at t er o f l eg i sl at i v e g race an dare al l owab l e o n l y as s p eci fi cal l y

p ro vi d edb y
s t atu te. See INDOPCO, In c. v . Co m m i s s i o n er, 5 03 U.S. 7 9 , 8 4 (1 9 92 ); New Co l on i al Ice Co
. v . Hel v eri ng , 2 9 2 U.S. 4 3 5 , 4 4 0 (1 9 3 4 ). Tax pay ers b ear t h e b u rd eno f p ro vi ng th atth ey are en t i t l edt o an y

d edu ct i o n s cl ai m ed . New Co l o n i al Ice Co . v . Hel v eri n g , 2 9 2 U.S. at4 4 0
.- 5
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Sect io n 1 3 6 6 (a)(1 )(A) p ro v id es th atan S co rp o rat i o n s h areh o ld er m ay t ak e i n t o acco u n th i s o r h er p ro rat a s h are o f t h e co rp o rat i o n ’ s l o s s es , d edu ct i o n s , o r cred i t s . Ho wev er, s ect i o n 1 3 6 6(d )(1 ) l i m i t s th e ag g reg at e am o u n t o f l o s s es an d d educt i o n s th e s h areh o l d er m ay t ak e i n t o acco u n t t o t he s u m o f (A) th e ad

ju s t ed b as i s o f t h e s h areh o l der’ s s t o ck i n th e S co rp orat i o n (ari s i n g fro m cap i tal
co n tri b u t i o n s t o t h e S co rp o rat i o n , s ee Nat hel v . Co m m i ss i o n er, 1 3 1 T.C. 2 6 2 (2 0 0 8), aff’ d , 6 1 5 F.3 d8 3 (2 dCi r. 2 0 1 0 )), an d(B) t h e s h areh o l d er’ s ad ju st edb as i s i n an y i n d eb t ed n es s o f th e S co rp o rat io n (o ft enacq u i redb y b o rro wi n g fu nd s fro m a t hi rd p art y

an dco n tri b u ti n g the p ro ceed s t o the co rp o rat i o n, s ee Gl eas o n v . Co m m i s s i o n er, T.C. M em o . 2 0 0 6 -1 9 1 ). M r. Ti n sl ey

co n ced es h e h adn o s t o cko r d eb t b as i s i n Co m m an dCo m

p u t ers atthe t im e o f i ts l i qu i d at i o n i n 2 0 1 0 . Ho wev er, h e co nt en d s th atup o n th e l i qu i dat i o n , h e as s u m edth e b al an ce du e o n th e n o t e as g u aran t o r, an db ecau s e h e
was t h e s o l e rem ai n i n g o b l i g o r, th i s as s u m p t i o n was a co n t ri b u ti o n t o cap it al , al l o wi n g h i m

t o d edu ctth e am o u n t o f Co m m an d Co m

p u t ers ’ l o s s es . Fu rt her, M r. Ti n s l ey as s ert s th atfo ll o wi ng Co m m an dCo m

p u t ers ’ l i qu i d at i o n, t he Ban k
ex p ect edh i m , as g u aran to r, t o rep ay th e l o an an dthatth e Ban k’ s ex p ect at i o n was
s u ffi ci en tt o g en erat e a b as i s fo r M r. Ti ns l ey i n Co m m an dCo m

p u t ers .- 6
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M erel y g u aran t eei n g an S co rp o rat i o n ’ s d eb ti s n o ts u ffi ci en tt o g en erat e a b as i s u n d er s ect i o n 1 3 6 6(d )(1 )(B). Sp en cer v . Co m m i s s i o n er, 1 1 0 T.C. 6 2 , 8 3 (1 9 9 8); Es t at e o f Leav it t v . Co m m i s s i o ner, 9 0 T.C. 2 06 , 2 1 1 (1 9 8 8 ), aff’ d , 8 7 5 F.2 d4 2 0 , 4 2 2 (4 t h Ci r. 1 9 8 9 ). In Rayn o r v . Co m m i s s io n er, 5 0 T.C. 7 6 2, 7 7 0 -7 7 1 (1 9 6 8), we s t at ed : “

No fo rm o f i n d i rect b orro wi n g, b e i t g u aran t y , s uret y , acco m m o d at i o n , co m ak i n g o r o t h erwi s e, g i ves ri s e t o i n d eb t ed n es s fro m th e
co rp o rat i o n t o t h e s h areh o l d ers u n t i l an du n l es s th e s h areh ol d ers p ay p arto r al l o f t h e o b li g at i o n . Pri o r t o th atcru ci al act , ‘ l i ab i l i t y ’ m ay ex i st , b u tn o td eb tt o th e
s h areh o ld ers .” Id . W e al so h av e s ai dth ata s h areh ol d er m ay o b t ai n an i n creas e i n b as i s i n an S co rp o rat i o n o n l y i f t h ere i s an eco no m i c o u t l ay o n th e p arto f t h e
s h areh o ld er t h atl eav es h i m o r h er “ p o o rer i n a m at eri al s en se.” Gl eas o n v . Co m m i s s i o n er, T.C. M em o . 2 0 0 6 -1 9 1 , s l i p o p . at2 4 (qu o t i ng Perry v . Co m m i s s i o n er, 5 4 T.C. 1 29 3 , 1 2 9 6 (1 9 70 ), aff’ dwi t h o u tp ub l i s hedo p in i o n, 1 9 7 1 W L 2 6 5 1 (8 t h Ci r. M ay 1 2 , 1 9 7 1 )). “ St at ed o t h erwi s e, t he s h areh o l der m u s tm ak e
an actu al ‘ i n v es t m en t ’ i n th e en t i t y ”. Id
. W e are m in d fu l th atth e Co u rto f Ap p eal s fo r t h e El ev en t h Ci rcu i t , t o wh i ch
an ap peal i n t h i s cas e wo u l dn o rm al l y l i e were t h i s n ot a s m al l t ax cas e, 1 h as h el d

1 Becau s e an y

ap p eal i n th i s cas e, i f i t were p erm i ss i b le, wo ul d l i e t o th e Co u rto f Ap p eal s fo r t h e El ev en t h Ci rcu i t, we fo l l o w th e p reced en tes t ab l i s h edi n (co n ti n u ed ...)- 7
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t h ata s h areh o l d er wh o h as g u aran t eeda l o an t o an S co rp o rat i o n m ay i n creas e h i s
o r h er b as i s wh ere, i n s ub s t an ce, th e s h areh o l d er h as b o rro wedfu n d s an d
s ub s eq u en t l y

ad v an cedth em

t o th e co rp orat io n . Sel fe v
. Un i t edSt at es , 7 7 8 F.2 d 7 6 9 , 7 7 3 (1 1 t h Ci r. 1 9 8 5 ). Th e Co u rt o f Ap p eal s n o t edth e g en eral ru l e t h atan
eco n om i c o u t l ay

i s req u i redb efo re a s t o ckh o l d er i n an S co rp o rat i on m ay i n creas e h i s o r h er b as i s , i d . at7 72 , b u th el dth atth i s ru l e d oes n o t req u ire “ a
s t ock h o ld er/ t ax pay er * * * [t o] i n al l cas es , ab s o l v e a co rp orat io n’ s d eb t b efo re s he
m ay reco g n i ze an i n creas edb as i s as a g u aran t o r o f a l o ant o a co rp o rat i o n”, i d
. Ob s erv in g t h at“ wh ere t h e n ature o f a t ax pay er’ s i n teres ti n a co rp o rat i o n i s i n i s su e, co u rt s m ay l o o kb ey o n dth e fo rm o f th e i n t eres tan di n v es t i g at e th e
s ub s t an ce o f t h e t ran s act i o n ”, i d . at7 7 4 , an dci t i n g Pl an t at i o n Pat tern s , In c. v . Co m m i s s i o n er, 4 6 2 F.2 d7 1 2 (5 t h Ci r. 1 9 72 ), aff’ g T.C. M em o . 1 9 7 0 -1 8 2 , 2 th e Co u rto f Ap p eal s h el dth ata s h areh o l der’ s g uaran t y o f a l o an t o an S co rp o rat i o n

1 (...co n t in u ed ) t h atci rcu i t . See Go l s en v . Co m m i s s i o n er, 5 4 T.C. 7 42 , 7 56 -7 5 7 (1 9 7 0 ), aff’ d , 4 4 5 F.2 d9 8 5 (1 0 t h Ci r. 1 9 71 ).

2 Th e U.S. Co u rto f Ap p eal s fo r th e El ev en t h Ci rcu i twas es t ab l i s h edo n Oct o b er 1 , 1 9 8 1 , p urs u an tt o the Fi ft h Ci rcu i tCo u rt o f Ap p eal s Reo rg an i zat i o n Acto f 1 9 8 0, Pub
. L. No . 9 6 -4 5 2 , 9 4 St at . 1 9 94 . InBo n n er v . Ci t y o f Pri ch ard , 6 6 1 F.2 d1 2 06 , 1 2 0 7 (1 1 t h Ci r. 1 9 8 1 ), t h atco u rtad o p t edth e d eci s i on s o f th e U.S. Co u rto f Ap p eal s fo r t h e Fi ft h Ci rcu i th an d edd o wn b efo re t h e cl o s e o f b u s i n es s o n Sep t. 3 0, 1 98 1 , as g o v ern i n g l aw i n th e El ev en t h Ci rcu i t .- 8
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“ m ay b e t reat edfo r t ax p u rp o s es as an equ i t y i n v es t m en ti n th e co rp orat i on wh ere t h e l en d er l o o k s t o t h e s hareh o l d er as th e p ri m ary o b l i g or.” Sel fe, 7 7 8 F.2 dat7 7 4. Th e Co u rto f Ap p eal s h el d t h atth i s d et erm i n at i o n i s an “ i n qu i ry fo cu s edo n h i g h l y
co m p l ex i s s u es o f fact an dth ats i m i lar i nq u i ri es m u s tb e carefu l l y

ev al u at edo n t h ei r o w n fact s.” Id
. 3 In Sel fe, th e t ax p ay er p res en t edth e d ep o s it i o n t es t i m o n y o f h er l o an o ffi cer s t at i n g th atth e b an kl o o k ed p ri m ari l y t o t h e t ax p ay er an dn o tthe
co rp o rat i o n fo r rep aym en to f t he l oan as wel l as ev i d en ce t h atth e S co rp orat i o n
was t h i n ly

cap i t al ized
. W e n o wtu rn t o t h e fact s i n th i s cas e t o d et erm i n e wh et h er p et i t i on ers h av e
es t ab l i s h edth atb y

th e en do f 2 0 1 0 (1 ) t he Ban k l oo k edt o M r. Ti n s l ey fo r rep aym en tan d(2 ) M r. Ti n s l ey m ad e eco n o m i c o u t l ay s i n m ak i ng th os e p aym en t s . Pet i t i o ners p res en tedn o ev i den ce t o s up p o rta fi n d i n g th at t h e Ban k l o o k ed p ri m ari l y t o M r. Ti ns l ey , as o p p o s edt o Co m m an dCo m

p u t ers , fo r rep aym en to f t h e l o an . 4 An dwe are m i n d fu l th at p et it i o n ers co n ced e t h atev enaft er t h e

3 Sel fe v
. Un it edSt at es , 7 7 8 F.2 d7 6 9 (1 1 t h Ci r. 1 9 8 5 ), was b efo re the Co u rt o f Ap peal s o n t h e t ax p ay er’ s ap p eal o f an o rd er g ran t i n g th e Go v ern m en t’ s m o t i o n fo r s u m m ary ju d g m en t . Th e ev i d en ce i n tro du ced b y th e t ax p ay er rai s ed t h e i s s u e o f a m at eri al fact as t o wh et h er t h e s h areh o l d er was th e p ri m ary o b l i g or wi t h res p ectt o t h e d eb t.

4 In p et i t i o n ers ’ p ret ri al m em o ran du m th ey s t at e t hat“ i n th e ex am i ner’ s rep o rt , s h e [t h e ex am i n er] recei v ed‘ a s t at em en tfro m Fi rs tCi t y Ban k , th e d eb t

(co n ti n u ed ...)- 9
-

co rp o rat e l i qu id at i o n , Co m m an dCo m

p u t ers rem ai n edan o ng o i n g b us i n es s
en t erp ri se. W e ack n o wl ed g e th atth e s t i p u l at i o n o f fact s i n th i s cas e s t at es th at“ [t ] h e p et i t i o n er co n t i n u es t o m ak e p aym en t s o n th e l o an ”, b u tth ere i s n o i n di cat io n th at t h e l o an p aym en t s were m ad e fro m M r. Ti n s l ey ’ s p ers o nal fu n d s rat h er t h an Co m m an dCo m

p u t ers ’ fu n ds wi t h M r. Ti n s l ey s i g n in g p aym en tch eck s as p res i den t . M o reo v er, we are m i n d fu l th atu n d er t he t erm s o f t h e ren ewal n o t e, t h e ren ewedl o an was t o Co m m an dCo m

p u t ers an d t h atM r. Ti ns l ey ’ s o b l i g at i o n
was t h ato f a g u aran t or, n o t t h e m ak er o f t h e l o an . Fu rt her, we are m in d fu l th atth e p ro m i s s o ry

n o t e fo r t h e 2 0 0 6 l o an , wh i ch was ap p en d ed t o t h e 2 0 1 1 ren ewal n o te, i n cl u d eda n o t at i o n t h at t h e l oan was s ecu redb y Co m m an dCo m

p u t ers ’ i n v en t o ry

4 (...co n t in u ed ) h o l d er,’ n o t i n g t h atPet i t i o n er was th e o ri g i n al g u aran t o r o n th e l o an .’ ” Pet i t i o n ers al s o as s ertth atth e ex am i n at i o n rep o rts t at es th atth e ex am i n er recei v eda l et t er fro m th e Ban k wh i ch s t at ed : “ Si n ce t h e co m p an y fo l d edi n 2 01 0 , M r. Ti n s l ey [Pet it i o n er] h as as s um edthe fu l l res p o n s i b i l i t y fo r t h i s l oan an d m ak es al l p aym en t s.” Pet i t io ners ’ p ret ri al m em oran du m al s o s t at es : “ Fi rs t Ci ty

Ban ki s s u ed a l et t er t o th e IRS ap p eal s o ffi cer s t at i n g th at * * * [t he fact th atth e l o an ren ewal was m ad e t o t h e d efu n ctCo m m an dCo m

p u t ers an dn o t t o M r. Ti ns l ey ] was th ei r s t an d ardo p erat i n g p ro cedu re” i n cas es “ wh ere t h e o ri g in al o b li g o r i s n o l o n g er act i ve an dwe are n o wd eal i n g wi t h th e p ers o n wh o was th e o ri g i n al g u aran t o r as t h e o n ly rem ai n in g p ri m ary

d eb t o r.” Des p i t e t h ei r i m

p ort an ce, n o n e o f t h es e d o cu m en ts was en t ered i nt o th e reco rd . W e th erefo re d o n o tco n s i der t h em i n d eci di n g th i s cas e.- 1 0 -

an d ag reem en t . Thus , we b el i ev e t h at(1 ) ev en aft er i t s l iqu i d at i on Co m m an d Co m p u t ers co n t in u edt o o p erat e, an d(2 ) t h e Ban k co n t in u ed t o l o o kt o Co m m an d Co m p u t ers as th e p ri m ary

o b li g o r o n th e l o an an dex p ect edi tt o m ak e t h e l o an rep aym en t s . Pet i t i o ners as s erti n th ei r b ri ef t h atth e ren ewal o f t h e l o an t o Co m m an d Co m p u t ers i n 2 0 1 1 d o es n o taffect th ei r p o si ti o n th atM r. Ti n s l ey b ecam e t h e p ri m ary o b l i g or o f th e l o an upo n Co m m an dCo m

p u t ers ’ l iqu i d at i on . “ Th e b an k , as a m at t er o f ad m i n i s t rat i v e co n v en i en ce, ch o s e t o ren ew t h e n o t e i ns t eado f i s su i ng a n ew n o t e. Th e n am e o n th e n ot e was th ato f t he fo rm er S co rp o rat i o n , an
en t i t y th atn o l o n g er ex is t edu n d er s t at e l aw. Th e Ban kwas aware o f t h i s an dh ad el ect edatthe t i m e o f l i qu id at i o n t o l eav e t h e n o te i n th e co rp o rat e n am e.” Th u s , p et i t i o n ers p o s i tthatM r. Ti n s ley as s u m edth e b an kd eb tat t h e t im e o f Co m m an d Co m p u t ers ’ l i qu id at i o n an dth at“ h i s s t atu s as th e s ol e rem ai n i n g o b l i g o r”, fo r t ax p u rp os es , cau sedth e rep aym en t s o f t h e l o an t o b e t reat edas co n tri b u t i o ns t o th e cap i t al o f Co m

m an d Co m

p ut ers . Res p o n den td i s ag rees , arg u i n g th at“ up o n th e Co rp o rat i o n ’ s l iqui d at i o n , th e d eb trem ai n ed u nd i stu rb ed : th e co rp o rat i on d i dn o t d efau l to n th e d eb t , th e t erm s o f t h e d eb twere n o tal t ered , an d p aym en t s o n th e d eb t co n t i n u ed .”- 1 1 -

Th ere i s i n su ffi ci en tev i d en ce i n t he reco rd t o p erm itu s t o m ak e, wi t h
co n fi d en ce, a fi nd i n g thati n b o t h 2 0 0 6 an d2 0 1 1 th e l o an was m ad e t o M r. Ti n s l ey p ers o n al l y , as o p p o s edt o Co m m an d Co m

p u t ers , an dth atM r. Ti n s ley , as th e b o rro wer, ad v an cedth e l o an p ro ceed s t o Co m m an dCo m

p u t ers . Becau s e p et i t i o n ers fai l edt o es t ab l i s h t h atth e Ban k l o o k ed p ri m ari l y t o M r. Ti n s l ey

t o
s at i s fy th e d eb t o b l i g at i o n o r t h atM r. Ti n s l ey m ad e an eco n om i c o u t l ay wi t h
res p ectt o t h e l o an , th ey

fai ledt o p ro v e t h ey

h ada b as i s i n Co m

m an dCo m

p u t ers
as o f Decem

b er 3 1, 2 0 1 0 , s uffi ci en tfo r t hem t o d edu ctthe rep o rt edb u s i n es s l o s s es .To refl ectthe fo reg o i n g , Deci s i o n wi ll b e en t ered fo r res p o n den t .