- 12 -
any agency that are backed by the full faith and credit of the
United States with remaining terms to maturity of no more than 10
years, mortgaged-backed securities with a stated maturity of no
more than 7 years, and certain repurchase and reverse repurchase
contracts.
On December 17, 1992, Caraville contributed $750,000 in
exchange for a 1-percent general partnership interest in Salina,
while Pallico contributed $74,250,000 in exchange for a 99-percent
limited partnership interest. The funds that Pallico contributed
to Salina were transferred to Pallico through a revolving credit
agreement between ABN and Escorial Corporation, N.V., an ABN
affiliate managed by ABN Trust. Mr. Van Burg assumed that ABN also
was the source of Caraville’s contribution to Salina.
The partnership agreement stated that the partnership would
pay a quarterly management fee of $125,000 to Caraville.
B. Salina’s Short Year December 17 Through 27, 1992
On December 17, 1992, Salina opened a custodial account with
ABN’s New York office. On December 17, 1992, Salina purchased,
through ABN, U.S. Treasury notes with a face value of $140 million
for a price of $139,891,953 (net of $320,192 accrued interest).
The Treasury notes each bore an interest rate of 4.625 percent and
were due to mature on November 30, 1994. Salina financed
approximately one-half of the purchase price of the Treasury notes
through a master repurchase agreement with Goldman Sachs (the
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011