Saba Partnership, Brunswick Corporation, Tax Matters Partnership - Page 71




                                       - 37 -                                         

                             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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