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Chase made a $975,298 interest payment to Saba. Between March 21
and 23, 1990, Saba earned interest of $94,384 on the Chase PPNs.
On March 23, 1990, Saba sold the Chase PPNs for $160 million in
cash and 4 LIBOR notes with a present value somewhere between
$37,488,889 and $38,594,384. Thus, Saba sold the Chase PPNs
worth $200,094,384 ($200 million (principal) plus $94,384
(accrued interest)) for cash and LIBOR notes worth no more than
$198,594,384. The $1,500,000 difference between the value of the
Chase PPNs and the total consideration that Saba received
represents Saba's transaction costs.
Taking into account the $975,298 interest payment that Saba
received on the PPNs, Saba walked away from its $200 million
investment in the Chase PPNs with no more than $199,569,682.
On July 13, 1990, Brunswick increased its interest in the 4
LIBOR notes held by Saba by purchasing 50 percent of Sodbury's
partnership interest. On August 17, 1990, Saba distributed 3 of
the LIBOR notes to Brunswick. On September 6, 1990, Brunswick
sold the 3 LIBOR notes for $26,601,451, resulting in a loss to
Brunswick of approximately $2,500,000. On April 3, 1991, Saba
transferred the remaining LIBOR note to SBC. On July 2, 1991,
SBC sold the LIBOR note for $7,040,954, resulting in a loss to
Brunswick of approximately $719,000.
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