- 4 - vessel was completed during 1983, petitioner did not wish to show it as an asset on its balance sheet, so petitioner arranged a series of transactions that permitted it to lease rather than own the vessel. For purposes of the legal question we consider, it is only necessary to understand that petitioner leased the vessel and then, several years later, wanted to be relieved from the burdensome terms of the lease. Under the agreements, petitioner had the choice of paying either to terminate the lease or to acquire the vessel. Petitioner chose to acquire the vessel under the terms of the agreements. By acquiring the vessel, however, petitioner effectively terminated the burdensome lease. We describe the following transactional steps employed for purposes of completeness: (1) The vessel was transferred to a trust created by Merrill Lynch Leasing, Inc. (Merrill Lynch), and of which Bankers Trust Co. (Bankers) was trustee; (2) Bankers, as trustee, entered into a Bareboat Charter6 through January 3, 2004, (20 years) with a partnership named Union Marine Transport Co. (UMTC), which consisted of two equal partners--petitioner’s subsidiary, Chemical Marine Fleet, Inc., and a subsidiary of Marine Transport Lines, Inc. (MTL), an unrelated entity that petitioner had previously utilized for operation and management of its oceangoing transport of chemicals; (3) UMTC concurrently 6 This was described by the parties as a long-term lease of a ship.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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