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were consistent with those set forth in the Zelisko memorandum
and were made 2 months before the Otrabanda partnership was
formed. McManaman's projections were also made well before
O'Brien purportedly formed the view that interest rates would
fall. On April 25, 1990, McManaman's projections were presented
to Brunswick's Board of Directors.
The record also shows that ABN and the other financial
institutions involved in the CINS transactions fully understood
Brunswick's intentions. The assumptions underlying the Zelisko
memorandum and McManaman's projections are echoed in a number of
ABN documents describing the partnerships. In addition, internal
memoranda maintained by Fuji and Norinchukin stated that the
transactions were designed to provide tax savings for Merrill
Lynch's customers. Finally, an internal Arthur Andersen
memorandum stated that "the only reason Brunswick formed the
partnership was to maximize the after tax earnings and cash flow"
from the sale of its Technical businesses.
Against this backdrop, we conclude that each of the
ostensible business purposes that petitioner cites as a tax-
independent justification for Brunswick's participation in the
partnerships is nothing more than a derivative or by-product of
the CINS transactions. Specifically, the partnerships' purchase
of the PPNs and CDs was not driven by the desire to "tie-up"
Brunswick's funds at a time when Brunswick was vulnerable to a
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