The ATO has published a Decision Impact Statement in relation to the AAT decision in Douglas Willersdorf-Greene and FCT  AATA 649; 2009 ATC 10-102. The case concerned whether interest on a loan used to satisfy a guarantee is deductible, where the later loan was taken out after the relevant income producing opportunity related to the guarantee had passed. The AAT held that the interest and the borrowing expenses incurred in relation to the guarantee were deductible.
The ATO says that it accepts that this conclusion was open to the AAT on the particular facts as found, and that the case is distinguishable from cases in which the guarantees related directly to the income earning activities of the relevant companies, and only related indirectly, if at all, to the income earning activities of the guarantors (Re Pope and FCT  AATA 1085 and Re Applicant and FCT  AATA 831).
For a copy of the Decision Impact Statement, go here