ASA Investerings Partnership, Alliedsignal Inc., Tax Matters Partner - Page 36

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             borne by the partners in accordance with their respective                                            
             interests.  Pursuant to the Bermuda Agreement, however,                                              
             AlliedSignal was obligated to, and did in fact, pay all of ASA's                                     
             expenses.  We also note that AlliedSignal's obligation to bear                                       
             expenses reduced AlliedSignal's return and undermined the stated                                     
             purpose of "obtaining a yield in excess of what they could obtain                                    
             from U.S. treasury securities".                                                                      


                    D.  Management                                                                                
                    The partnership agreement stated that the partners would                                      
             share in the management of ASA.  The agreement provided that                                         
             ASA's activities would require the "vote or consent" of partners                                     
             whose partnership percentages totaled at least 95 percent.  In                                       
             reality, however, AlliedSignal made all the critical decisions.                                      
             ABN was a compliant and accommodating party, which was chosen for                                    
             the venture because it was willing to serve at AlliedSignal's                                        
             direction.                                                                                           
                    The management provision in the partnership agreement was                                     
             perfunctory, because the scheduled steps were prearranged by                                         
             Merrill Lynch and agreed to by AlliedSignal and ABN before they                                      
             executed the partnership agreement.  The distribution of the                                         
             LIBOR notes typifies how management responsibilities were                                            
             "shared".  Before the parties executed the partnership agreement,                                    
             AlliedSignal had already decided that the LIBOR notes would be                                       





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