ASA Investerings Partnership, Alliedsignal Inc., Tax Matters Partner - Page 33

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             specified return, however, was not provided in, and was contrary                                     
             to, AlliedSignal's and ABN's partnership agreement.  Second, in                                      
             Hunt, the partner receiving the guaranteed return was also                                           
             eligible to receive partnership profits in excess of such                                            
             partner's guaranteed return.  ABN, however, was only entitled to                                     
             its specified return and nothing more.  Cf. O'Hare v.                                                
             Commissioner, supra at 87 (stating that the taxpayer's failure                                       
             to share in any of the profits above his prearranged fee                                             
             militated against a finding that he was a joint venturer).                                           
             Therefore, Hunt v. Commissioner, supra, is inapplicable.                                             
                    B.  Loss Allocations                                                                          
                    The partnership agreement provided that losses would be                                       
             shared on a pro rata basis.  ABN, however, did not intend to, nor                                    
             did it actually, share in ASA's losses.                                                              
                          1.  Loss on PPN Sale                                                                    
                    Prior to meeting AlliedSignal's representatives, Mr. den                                      
             Baas told other ABN officials that ABN would not bear any loss                                       
             relating to the PPN sale.  The Bermuda Agreement was consistent                                      
             with this representation.  ABN's April 11, 1990, internal                                            
             memorandum further confirms this agreement.  It states:  "Any                                        
             possible loss (for whatever reason) on the sale of the medium                                        
             term notes will be fully borne by Allied Signal."  The parties                                       
             ensured that AlliedSignal would bear such loss by embedding the                                      
             cost of the PPN sale in the value of the LIBOR notes (i.e., the                                      





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