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Between 1984 and 1992, MDA offered investments in bus stop
shelters (hereinafter referred to as the bus stop shelter
program).3 Each bus stop shelter was referred to as a bus stop
shelter unit. Through the bus stop shelter program, investors
entered into a purchase agreement with MDA pursuant to which the
investor acquired a bus stop shelter unit for $10,000. Upon the
purchase of the bus stop shelter unit, the investor had the option
to either lease the bus stop shelter to MDA or independently
operate and maintain the shelter.
If the investor chose to lease the bus stop shelter to MDA,
the investor was required to enter into two agreements: An
equipment lease agreement and a maintenance agreement. Pursuant to
the terms of these agreements, MDA agreed to: (1) Pay the investor
$200 per month (less $30 per month for maintenance costs); (2)
maintain, operate, and assemble the shelter; and (3) maintain
insurance for the shelter.
Upon the expiration of the agreements, MDA agreed (pursuant to
a buyback agreement) that it would repurchase the bus stop shelter
from the investor for $10,000 or its fair market value, whichever
was higher.
3 By using the term "shelter" we do not mean to suggest
or decide that the investments herein were "tax shelters" as that
term is understood.
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Last modified: May 25, 2011