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reported by Otrabanda on the sale of the IBJ CDs ($633,333) as
other income, rather than capital gain. If Brunswick had
reported Skokie’s distributive share of the gain as capital gain
on its consolidated Federal income tax return, Brunswick would
have reported a short-term capital loss attributable to Otrabanda
of $59,541,173.
For financial reporting purposes, Brunswick reported a loss
of $1,703,173 on the sale of the 4 Sumitomo LIBOR notes. The
$1,703,173 loss represents the difference between the cash
proceeds of $17,458,827 from the sale and the $19,162,000 present
value that Merrill Lynch assigned to the Sumitomo LIBOR notes on
the date that they were distributed to Brunswick. The $1,703,173
loss was recorded in the portion of Brunswick's Accrued
Disposition Costs reserve account allocated to partnership
activity.
G. Partial Redemption of Bartolo's Partnership Interest
On December 4, 1990, Otrabanda held a partnership meeting
and the partners agreed that the partnership would partially
redeem Bartolo’s interest in the partnership. On the same date,
Otrabanda distributed $46,370,431 in cash to Bartolo in
redemption of a 35-percent partnership interest. On December 4,
1990, Bartolo transferred the $46,370,431 plus $34,569 to
Clavicor, and Clavicor transferred the full amount to ABN to be
applied as a credit against its loan account.
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