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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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Last modified: May 25, 2011