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(Stubbeman). Mr. Newman (and thereafter Stubbeman) acted as
special tax counsel and underwriter's counsel on the Whitewater
and Ironwood bond issues. Mr. Newman prepared the Bond documents
used in the Whitewater and Ironwood deals. It is customary for
bond counsel to draft, disseminate, and revise all documents
needed to bring about the issuance of a tax-exempt bond. In this
case, however, Stubbeman assumed that responsibility inasmuch as
it was preparing several sets of similar documents for a number
of other bond transactions to be issued at the same time as the
Whitewater and Ironwood bonds.
The plan that was developed contemplated that two firms--
Donaldson, Lufkin & Jenrette Securities (DLJ) and Drexel,
Burnham, Lambert, Inc. (Drexel)--would be the underwriters on the
Whitewater and Ironwood bond issues. Ira McCown, an investment
banker at DLJ, was deeply involved in bringing the Whitewater and
Ironwood bonds to market. The Interfirst Bank of Houston would
be trustee for the bondholders. The financing plan further
contemplated that the Housing Authority would issue the Bonds and
then lend the Bond proceeds to a developer, in exchange for a
developer note. The Housing Authority would then assign the
developer note to the Trustee bank. The developer would make
payments on its note to the Trustee bank. The developer would
use the Bond proceeds, which were to be in a "developer loan
fund", to construct the projects.
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