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to various entities. With respect to the equipment, a wrap lease
was executed between Hambrose as lessor and Charterhouse as
lessee. Hambrose assigned the wrap lease to the partnership when
the partnership purchased the equipment. The partnership
purchased the equipment subject to all liens created at each
stage of the transaction, including the liens of the original
third-party lenders, the wrap lease, and all user leases. At the
end of the day, the partnership owned the computers, the
operating companies used them, and Charterhouse, Hambrose, and
the partnership traded streams of financing payments and lease
payments. The transactions are described in more detail as
follows.
The Initial Equipment
CIS initially purchased, subject to financing from third-
party lenders, certain IBM computer equipment (the initial
equipment), for a total purchase price of $825,150.34. CIS
leased all of the initial equipment to Harrisburg Hospital,
Danbury Hospital, and Leeds & Northrup, the actual end users of
the equipment.
The Initial Equipment Purchase--Charterhouse
The second purchaser3 then paid CIS $494,861--$19,794 in
cash and the balance represented by nonrecourse installment
3 The “second purchaser” was someone other than
Charterhouse. The "second purchaser" was never identified in the
partnership's private offering memorandum (POM).
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Last modified: May 25, 2011