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Brunswick's capital losses from its partnership investments, and
that Brunswick would have $51 million in capital losses to carry
back to taxable years 1987 through 1989. On April 25, 1990,
McManaman presented his projections to Brunswick's Board of
Directors.
D. Brunswick's Purchase of 50 Percent of Sodbury's
Partnership Interest
During a July 13, 1990, Saba partnership meeting, Sodbury
requested that the remaining partners purchase 50 percent of its
interest in the partnership. Brunswick agreed to pay $92,452,227
in cash for 50 percent of Sodbury's partnership interest based in
part upon Pepe's valuation of the Fuji and Norinchukin LIBOR
notes. In notes dated July 13, 1990, Pepe valued the Fuji and
Norinchukin LIBOR notes held by Saba at $36,213,588, and then
added to that amount $2,035,000--the sum of the $1,500,000
private placement discount and an unidentified additional amount
of $535,000. Pepe rounded the resulting figure of $38,248,588 up
to $38,250,000. By valuing the Fuji and Norinchukin LIBOR notes
in this fashion, Sodbury was relieved of the cost or private
placement discount associated with the sale of the Chase PPNs.
After Brunswick's purchase of 50 percent of Sodbury's
interest in Saba, Brunswick held a 54.5-percent partnership
interest in Saba, Skokie held a .5-percent partnership interest,
and Sodbury held a 45-percent partnership interest.
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