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petitioner to demonstrate its financial ability to pay under the
applicable margin rules. The $16,866,571 was transferred back to
petitioner that same day at 1:39 p.m.
Pursuant to the regular settlement rules, the resale cross-
trades were settled between petitioner and Gallagher on
September 21, 1992. The total selling price credited to
petitioner's account with Bear Stearns was $868,412,129 (before
commissions and fees). Expenses incurred by petitioner with
respect to the purchase and resale trades included: SEC fees of
$28,947, interest of $457,846, a margin writeoff of $37, and
commissions of $998,929. Petitioner had originally agreed to pay
Twenty-First commissions of $1,000,000, but Twenty-First adjusted
its commissions by $1,070.55 to offset computational errors in
calculating some of the purchase trades.
Due to the different settlement dates, petitioner was the
shareholder of record of 10 million Royal Dutch ADR's on the
dividend record date and was therefore entitled to a dividend of
$22,545,800. On October 2, 1992, Royal Dutch paid the declared
dividend to shareholders of record as of September 18, 1992,
including petitioner. Contemporaneously with the dividend, a
corresponding payment was made to the Netherlands Government
representing withholding amounts for dividends paid to U.S.
residents within the meaning of the United States-Netherlands Tax
Treaty, Convention With Respect to Taxes on Income and Certain
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