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The Sale-Leaseback Transactions
The transactions can be described in general as follows: CIS
and Comdisco purchased with a combination of cash and borrowed
funds IBM computer equipment, which they then sold to
Charterhouse, subject to the original financing. Charterhouse
then (1) leased the equipment to various operating companies who
actually used the equipment, and (2) sold the equipment to
Hambrose, subject to the original financing and the user leases.
Hambrose then sold the equipment to the partnership, subject to
the original financing and the user leases. At the end of the
day, the partnership owned the computers, the operating companies
used them, and Charterhouse, Hambrose, and the partnership traded
streams of financing payments and lease payments. The
transactions are described in more detail, as follows.
The Initial Equipment
CIS financed, on a nonrecourse basis, the purchase of
certain IBM computer equipment (the initial equipment), for a
total purchase price of $589,791.26. Charterhouse then paid CIS
$419,132.00 for the initial equipment, in the form of cash, a
note, and an assumption of liabilities. These liabilities were
nonrecourse as to Charterhouse. All of the initial equipment was
leased by Charterhouse to Fluor Corporation, the actual end user
of the equipment. On or about March 19, 1984, Hambrose purchased
the initial equipment from Charterhouse for $419,132.00, subject
to the liens of the original third-party lender, and the user
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Last modified: May 25, 2011