ASA Investerings Partnership, Alliedsignal Inc., Tax Matters Partner - Page 20

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             AlliedSignal used proceeds from the loan to extinguish the                                           
             commercial paper it had issued on August 2, 1990.  AlliedSignal                                      
             and ASA, in a series of extensions, changed the maturity of the                                      
             AlliedSignal Short-Term Notes from December 28, 1990, to December                                    
             31, 1993.                                                                                            
             VI.  ASA Distributes the LIBOR Notes to AlliedSignal                                                 
                    On August 21, 1990, the ASA partnership committee met in                                      
             Bermuda and authorized a distribution of assets.  The minutes of                                     
             this meeting state:                                                                                  
                    The Representative of Dominguito Corporation N.V.                                             
                    expressed concern over the volatility of the                                                  
                    investments.  He stated that Dominguito would prefer                                          
                    cash in any distribution from the Partnership.  The                                           
                    Representative of Allied-Signal Inc. and Allied-Signal                                        
                    Investment Corporation voiced his opinion that they                                           
                    expected favorable interest rate fluctuations.  He                                            
                    stated that they would prefer to receive Installment                                          
                    Purchase Agreements in any distribution of assets of                                          
                    the Partnership.                                                                              
             Following this meeting, ASA distributed $167,469,860 of LIBOR                                        
             notes to AlliedSignal, $2,866,140 of LIBOR notes to ASIC, and                                        
             $116,279,033 in cash and commercial paper to Dominguito.                                             
                    For purposes of the distribution, ASA valued the LIBOR notes                                  
             at $170,336,000.  The value of the LIBOR notes reflected a                                           
             $6,372,000 increase in value since August 2, 1990, and included                                      
             $6,375,000 attributable to the cost of selling the PPNs.  The                                        
             distribution of LIBOR notes resulted in AlliedSignal bearing the                                     
             entire $6,375,000 cost of selling the PPNs (i.e., such cost was                                      
             embedded in the value of the LIBOR notes).  In addition,                                             




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