1 billion as of March 31, 2015, TAQA is thinly capitalized
relative to its reported debt of AED 74.
If a captive is undercapitalized or thinly capitalized
, the IRS may assert the captive is not bearing risk because it is not in a financial position to do so; in this regard, the IRS may view letters of credit and "naked" guaranties provided by the captive's parent company with suspicion.
As the current cycle continues, thinly capitalized
companies will face sever economic challenges that will promote opportunities for consolidation throughout the oil and gas industry.
The firms are opaque, thinly capitalized
structures whose creditors can "run"--that is, try to withdraw their money, leaving the banks insolvent and nonfunctioning.
tech stock market bubble of the late 1990s and the housing bubble of the 2000s--and argue that the latter's bursting was far more devastating because too many of the consequences fell directly on the thinly capitalized
, highly leveraged financial sector that could ill afford the losses that the bursting created.
Ask about IRS rules on thinly capitalized
businesses and any potential IRS issues related to unreasonable compensation or excess accumulated earnings.
As a rule, insurance industry failures were often limited to small, thinly capitalized
or undiversified companies--mortgage insurers for example--the executives said.
Every national supervisor has an incentive to find that "our banks are safe," even if many institutions are only thinly capitalized
and thus weaken the system as a whole.
Practically speaking, thinly capitalized
corporations are poor credit risks, but piercing the veil may require additional evidence, such as failure to observe formalities.
Hence, the well-endowed corporation provides stronger protection to injured third parties than the thinly capitalized
unincorporated ventures that would otherwise undertake those risky ventures.
Having said that, what we are seeing is a movement of subprime lending, away from more thinly capitalized
firms to better-capitalized firms who intend to [have a] permanent presence in the market.
, lacking experience, unable to change direction, some developers are hard-pressed to meet the demands and expectations of a more sophisticated buyer-centric market.