- 82 -
interest was offset by the appreciation of the fixed-rate cash
flows that it was obligated to pay relative to the floating rate
cash flows it was entitled to receive under the Colgate debt
swaps. Kannex owed ABN Cayman Islands $3,180,453. For reasons
that the record does not disclose, the amount Kannex paid was
higher by $1,655,000, and this excess was credited to den Baas'
Financial Engineering Group. The back-to-back hedge swaps
between Kannex and ABN New York and ABN New York and Merrill
Capital were also terminated at the same time. Although the
terms of the swaps were identical, for reasons not disclosed in
the record, the termination payment that ABN New York made to
Kannex was $500,000 less than the termination payment that was
received from Merrill Capital. Kannex's balance sheet for the
period ended January 27, 1992, shows remaining stockholder's
equity of $17,278. Of this amount, $6,000 was attributable to
the loans that Kannex had originally made to the foundations to
finance their contributions and the rest may have been
attributable to a capitalized loan from ABN. All the proceeds of
Kannex's participation in ACM were, in one way or another,
remitted to ABN. Liquidation procedures commenced in the
following month.
OPINION
ACM structured its sale of the Citicorp Notes to fall within
the contingent payment sale provisions of section 15a.453-1(c),
Page: Previous 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 NextLast modified: May 25, 2011