Medieval Attractions N.V - Page 127

                                       - 74 -                                         
               Dapy and Roundabout acted as guarantors on the commercial              
          paper transactions and received fees for the service.  Although             
          the fees were paid to Dapy and Roundabout, the fees were                    
          ultimately distributed to the group of Spanish investors.                   
          Neither Dapy nor Roundabout was actually required to make a                 
          payment as a guarantor.                                                     
               Subsequent tranches of commercial paper were issued on dates           
          including September 17, 1988; December 14, 1988; March 15, 1989;            
          June 11, 1989; September 10, 1989; March 6, 1990; August 30,                
          1990; November 26, 1990; and later.  These transfers used the               
          same type of circular funding.  The only differences were the               
          dates, bank accounts, amount of money, and which entities were              
          used.                                                                       
               The companies that participated in the commercial paper                
          transactions and the companies that acted as guarantors of the              
          paper were controlled by the Spanish investors.  Primarily,                 
          Santandreu directed and A. Gelabert and Onate carried out various           
          aspects of the commercial paper transactions.  Santandreu owned             
          an interest in a finance company and had been represented by the            
          other Spanish investors to be an expert in international finance.           
          XII.  Royalty Transactions Relied Upon in Federal Tax Returns               
               The positions taken by the Medieval Times entities on their            
          Federal tax returns with regard to royalty payments were based on           
          the following series of purported transactions:  Gatetown’s                 
          purchase of the Medieval Times concept from TM on March 1, 1986,            




Page:  Previous  64  65  66  67  68  69  70  71  72  73  74  75  76  77  78  79  80  81  82  83  Next

Last modified: May 25, 2011