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Percentage
Partner Interest Gain
Skokie .5 $633,333
Brunswick 9.5 12,033,334
Sodbury 90.0 114,000,000
Total 100.0 $126,666,667
The $126,666,667 gain that Saba reported on its March 31, 1990
tax return was not included on Saba's audited or unaudited
financial statements for the year ended March 31, 1990.
Saba invested the $160 million that it received on the sale
of the Chase PPNs in time deposits and commercial paper. Saba
acquired approximately $50 million of Brunswick commercial paper
between September 20 and 26, 1990. Saba held Brunswick's
commercial paper through April 3, 1991, when it contributed the
commercial paper to SBC International Holdings, Inc. See
discussion infra p. 44.
C. McManaman's Tax Projections
On April 20, 1990, McManaman prepared a schedule entitled
"FOREIGN PARTNERSHIP TAX UPDATE" in which he projected that
Brunswick would realize capital losses of $80 million
attributable to "FOREIGN PARTNERSHIP I" (Saba) and capital losses
of $57 million attributable to "FOREIGN PARTNERSHIP II" (the yet
to be formed Otrabanda partnership). In addition, McManaman
projected that Brunswick would realize capital gains of $91
million attributable to the sales of its Technical businesses and
Nireco stock, that such capital gains would be offset by
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