A profitco will form an LP in order that a limited recourse loss-transfer loan can be made to the LP

A direct recourse loan by a Lossco to a subsidiary Profitco (Opco) would not have complied with a debt indenture of Opco.  Accordingly, the loss shifting transactions will entail Lossco making an interest-bearing loan to a newly-formed subsidiary LP of Opco, with recourse under the loan limited to the pref shares of an affiliated Newco acquired by the LP with the loan proceeds.

Neal Armstrong.  Summary of 2013 Ruling 2013-0483491R3 under s. 111(1)(a).