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representatives testified convincingly on this point. Moreover,
their testimony was bolstered by their detailed review and
consideration of the proposed investment and the minutes of the
board of director’s meeting approving the investment.6
We need not dwell on respondent’s contention that FPL failed
to evaluate fully the STAMPS investment strategy. We are convinced
that FPL evaluated the STAMPS strategy in sufficient detail to
determine that the strategy presented greater market risk than it
was willing to accept. FPL invested in Salina on the condition
that Salina’s STAMPS portfolio would be promptly liquidated and
reinvested under the MAPS strategy. There is no dispute that FPL
carefully evaluated the potential risks and rewards of the MAPS
strategy. FPL’s “due diligence” included two meetings with Mr.
Silverstein. Moreover, at FPL’s request, Mr. Silverstein presented
FPL with several analyses of the financial risks and rewards
associated with the MAPS investment strategy under a variety of
economic scenarios.
We are convinced that FPL’s investment in Salina provided a
reasonable opportunity for FPL to earn profits independent of tax
benefits. As previously discussed, FPL carefully evaluated the
potential risks and rewards of the MAPS strategy. Mr. Silverstein
6 Although the minutes also mention a potential tax
benefit associated with the investment, we infer that FPL did not
consider the tax benefit to be paramount to the transaction,
rather merely ancillary or collateral thereto.
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