- 27 -
expected to invest the partners' contributions pending
acquisition of Colgate debt. The earlier oral assurance to which
RMD refers may have been one that Merrill made to the first
section 453 partnership in which ABN collaborated, the Nieuw
Willemstad Partnership. Failing to locate a buyer for the
partnership's private placement notes within the time frame
required by the partners, Merrill itself became the counterparty,
buying the private placement notes and issuing LIBOR Notes. A
second condition was that the loan to Kannex be syndicated in
order to reduce the credit risk.
ABN records indicate that the credit proposal was "approved
per RMD". There is no record of any modification to the NACC and
RMD conditions. Under ABN procedures, if credit conditions had
been changed, the changes should be reflected in NACC files.
Although there are cases in which a branch fails to advise NACC
of changes in credit conditions or changes are made without
documentation, such cases are rare.
Kannex was incorporated in the Netherlands Antilles on
October 25, 1989, and issued shares with a total par value of
$6,000, held in equal proportions by Coign and Glamis. Kannex's
financial statements reflect accounts receivable for loans to the
foundations in the amount of $6,000, indicating that they
borrowed from the corporation the funds they used to acquire its
stock. By "Revolving Credit Agreement" dated November 2, 1989,
ABN's Cayman Islands Branch (ABN Cayman Islands) agreed to make
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011