Saba Partnership, Brunswick Corporation, Tax Matters Partnership - Page 74




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         first assigning a base value of $36,758,918 to all 4 of the Fuji             
         and Norinchukin LIBOR notes and adding to that amount the                    
         $1,500,000 private placement discount and the $535,000 amount                
         that first appeared in Pepe's notes dated July 13, 1990.  Pepe's             
         notes dated August 17, 1990, identify the $535,000 amount as a               
         "fee".  Pepe rounded the resulting figure of $38,793,918 up to               
         $38,794,000 and multiplied that figure by the ratio of the total             
         NPA of the retained Norinchukin LIBOR note ($25,765,000) to the              
         NPA of all the LIBOR notes ($102,970,000).  Pursuant to these                
         computations, Pepe valued the Norinchukin LIBOR note that Saba               
         retained at $9,707,000 and the 3 LIBOR notes that Saba                       
         distributed to Brunswick at $29,087,000.                                     
              Sodbury transferred the $24,016,789 that it received from               
         Saba to ABN to be applied as a credit against its loan account.              
              H.  Brunswick's Sale of 3 LIBOR Notes                                   
              In August 1990, concurrent with Saba's distribution of the 3            
         LIBOR notes to Brunswick, Merrill Lynch was making arrangements              
         for Brunswick to sell the LIBOR notes.  On August 14, 1990, a                
         representative of the Bank of Tokyo, Ltd. (BOT) prepared a                   
         memorandum seeking approval from BOT's head office to purchase               
         the 3 LIBOR notes from Brunswick in connection with a structured             
         transaction to be arranged by Merrill Lynch.  On August 24, 1990,            









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