ACM Partnership, Southampton-Hamilton Company, Tax Matters Partner - Page 6

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          transactions in which ACM engaged are collectively referred to as           
          the contingent installment sale transaction (CINS transaction).             
               The design of the CINS transaction appears to have                     
          originated in discussions in early 1989 between Macauley Taylor             
          (Taylor), a managing director of Merrill's Swap Group, and                  
          James Fields (Fields), a member of his staff.  From the spring of           
          1989 through the summer of 1990, the Swap Group and Merrill's               
          investment bankers promoted the idea among Merrill's clients.               
               Colgate-Palmolive Co. (Colgate) was one of Merrill's clients           
          that Taylor and his staff approached.  Colgate's treasury                   
          department regularly consulted Henry Yordan (Yordan), a managing            
          director in Merrill's Capital Markets Group, concerning                     
          developments in the debt markets.  Yordan was aware that Colgate            
          had reported a sizeable capital gain (approximately $105 million)           
          for its 1988 taxable year on its sale of the Kendall Co.                    
          (Kendall), and that Colgate might be receptive to the CINS                  
          transaction.  Through Yordan's introduction, a meeting was held             
          on May 15, 1989, at which Taylor and his staff described the CINS           
          transaction to Colgate's assistant treasurer, Hans Pohlschroeder            
          (Pohlschroeder).  Merrill's representatives stated that, apart              
          from the few elements that were essential to secure the desired             
          tax consequences, the partnership structure could be adapted to             
          suit a variety of investment objectives.                                    
               Colgate's initial reaction to the proposal was skeptical.              
          Pohlschroeder explained that Colgate did not have the required              




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