- 69 - operating at the time. C&L used 3-year income streams on the two nonoperating castles instead of the 5-year income streams used on the operating castles. The New Jersey and Glendale/San Diego castle amounts were added to the MDT lump-sum amount for a total of $15.75 million. The MDT discounted present value amounts were computed as: Buena Park, $9.9 million; New Jersey, $3.15 million; and Glendale/San Diego, $2.7 million. The lump-sum amount for MSI was $7 million. Under this plan, MSI and MDT would have collectively given Manver promissory notes for $22.5 million in 1987 and paid interest on the promissory notes monthly. The principal would have been due in 5 years. Under the lump-sum plan, MSI and MDT would have been subject to withholding tax on the interest payments to Manver. C&L therefore suggested that the withholding could be avoided through the use of commercial paper. C&L advised that there was an exemption in the U.S. tax law that excused the withholding tax on interest on promissory notes (commercial paper) with a term of less than 183 days. Forsyth dealt primarily with Santandreu and Onate concerning the commercial paper. The procedure required issuing an initial round of commercial paper (tranche) with a maturity of less than 183 days. Prior to maturity, the tender panel manager must have the cash available to repay the first tranche. The cash could come from a new issue of commercial paper, or, alternatively, the tender panel manager could call on the guarantor or the companyPage: Previous 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 Next
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