- 18 - In 1982, Mr. Johnson met with representatives of Hall to discuss petitioner's EVC's. At their first meeting regarding petitioner's EVC's, Mr. Corde advised Mr. Johnson of potential alternatives that might be available to petitioner, including the possibility of petitioner's forming its own insurance subsidiary. Thereafter, Mr. Corde and Mr. Garrity attended meetings relating to the planning, structuring, and implementation of petitioner's subsidiary and petitioner's excess value activity. In September 1982, at the request of petitioner, Hall prepared a document titled "United Parcel Service--A Preliminary Analysis of an Insurance Subsidiary" (preliminary analysis). The preliminary analysis indicated that Hall understood that petitioner currently was liable to its shippers for the value of any parcels lost or damaged up to $100. The preliminary analysis indicated that Hall understood that those parcels with values in excess of $100 could be declared by the shipper, and the shipper could secure protection at a cost of 25 cents per $100 of value in excess of the first $100. Hall further understood that while the protection provided by the EVC was not considered to be insurance, insurance could be provided by a UPS-owned insurance company. The preliminary analysis then proceeded to make the following assumptions and conclusions: We have been advised that the revenues generated by this "declared value" protection for the 1981 year approximated $67,000,000 and that the loss in excess ofPage: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
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