ASA Investerings Partnership, Alliedsignal Inc., Tax Matters Partner - Page 39

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             that ABN received its specified return and was preoccupied with                                      
             determining the amount of, and the labels attached to, the direct                                    
             payments to ABN.  Petitioner contends that there was no                                              
             assurance, commitment, or binding agreement to pay ABN a                                             
             specified return.  AlliedSignal, however, scrupulously calculated                                    
             the shortfall between Barber's and Dominguito's income                                               
             allocations and ABN's specified return and recorded this                                             
             shortfall as an accrued liability for financial purposes.                                            
             AlliedSignal wanted to ensure that its direct payments, and ASA's                                    
             income allocations, to ABN were being properly credited toward                                       
             AlliedSignal's obligation to pay ABN's specified return.  In                                         
             essence, AlliedSignal's conduct resembled that of a meticulous                                       
             borrower rather than a partner.                                                                      


                    B.  ABN                                                                                       
                    From the outset of the venture, ABN processed the ASA                                         
             transaction just like any other large corporate loan.  For loans                                     
             more than $25 million, ABN required approval from its North                                          
             American Credit Committee, Foreign Credit Department, and                                            
             headquarters.  Accordingly, ABN New York submitted the loan                                          
             application relating to the plan, and ABN approved the loan,                                         
             through the aforementioned channels.  Although ABN was,                                              
             ostensibly, considering a loan to Barber and Dominguito, it                                          
             evaluated and approved the loan based on AlliedSignal's financial                                    





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