Union Carbide Foreign Sales Corporation, et al. - Page 3




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          relief from the terms of a burdensome lease.  Petitioner argues              
          that section 162 is applicable to the portion of the cost that it            
          contends was attributable to buying its way out of an onerous or             
          burdensome lease.  Our consideration of whether section 167(c)(2)            
          applies in these circumstances is a question of first impression.            
                                      Background                                       
               For purposes of this motion for partial summary judgment,4              
          the parties agree about the underlying facts and that this matter            
          is ripe for consideration of the legal question.  Although                   
          respondent generally questions the substance of this transaction,            
          for purposes of the legal question presented in his motion,                  
          respondent accepts the form of and/or petitioner’s explanation               
          for the subject transaction.  If respondent is unsuccessful in               
          his motion, a trial will be necessary to address respondent’s                
          position regarding the substance of the transaction(s) and                   
          related issues including the basis of the vessel in question.5               
               The asset under consideration, the Chemical Pioneer is a                
          seagoing vessel that was manufactured to petitioner’s                        
          specifications for the transport of liquid chemicals.  When the              



               4 With the exception of what appears to be a computational              
          issue, all other issues in these consolidated cases have been                
          resolved by agreement of the parties.                                        
               5 In addition, there are several procedural motions                     
          outstanding that we will need to address if the motion for                   
          partial summary judgment is not dispositive of the substantive               
          issue.                                                                       





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