Saba Partnership, Brunswick Corporation, Tax Matters Partnership - Page 48




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              Brunswick filed a Form 1120 (U.S. Corporation Income Tax                
         Return) for 1990 reporting capital gains of $29,809,938 and                  
         $100,782,182 attributable to the sales of its Technetics division            
         businesses and Nireco stock, respectively.                                   
              D.  Merrill Lynch Partnership Proposal                                  
              In December 1989, after Brunswick had announced its                     
         intention to sell its Technical businesses and Nireco stock,                 
         Brunswick officials, including McManaman, Erwin, and Zelisko, met            
         with representatives of Merrill Lynch's investment banking group,            
         including E.S.P. Das (Das), managing director and vice chairman              
         of Investment Banking, Arshad R. Zakaria (Zakaria), Thomas R.                
         Williams, Jr. (Williams), and Jeff Neal (Neal).  During this                 
         meeting, Das described a structured transaction, including the               
         formation of a partnership between Brunswick and a foreign                   
         financial institution, that would generate capital losses that               
         Brunswick could use to offset the capital gains that it would                
         realize from the sale of its Technical businesses.                           
              Merrill Lynch used flowcharts in making its presentation to             
         Brunswick.  The only scenario depicted in the flowcharts was a               
         tax loss for Brunswick.                                                      
              E.  The Zelisko Memorandum                                              
              In January 1990, O'Brien and Zelisko attended a second                  
         meeting with Das and other Merrill Lynch representatives for                 
         further discussions regarding the partnership proposal.  On                  





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