Union Carbide Foreign Sales Corporation, et al. - Page 5




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          entered into a contract (sublease) with petitioner, under which              
          petitioner reserved 75 percent of the vessel’s capacity and was              
          responsible for 100 percent of the payments due under the                    
          Bareboat Charter; (4) UMTC also entered into an operating                    
          agreement with Marine Transport Management, Inc. (a subsidiary of            
          MTL), to manage and operate the vessel; and, (5) UMTC entered                
          into a marketing agreement with another MTL subsidiary to market             
          the portion of the vessel not used by petitioner, including the              
          25 percent not reserved by petitioner.                                       
               The terms of the Bareboat Charter permitted petitioner to               
          terminate the lease and walk away from the arrangement by the                
          payment of a scheduled amount.  Petitioner, however, chose to                
          acquire the vessel.  On December 29, 1993, petitioner purchased,             
          for $107,748,925, Merrill Lynch’s interest in the grantor trust              
          that held the vessel, including the title to the vessel and                  
          rights to its use.  The $107,748,925 payment was about 20 percent            
          less than the amount that petitioner would have had to pay to                
          terminate the lease without acquiring ownership of the vessel.7              
          On June 30, 1994, the Bareboat Charter and related contracts were            
          canceled, the UMTC partnership was dissolved, and petitioner                 
          acquired title to the vessel from the trust.  After December                 
          1993, petitioner did not make any (lease) payments under the                 


               7 For purposes of deciding the issue in this summary                    
          judgment motion, it should not matter whether it was more or less            
          costly to acquire the vessel or to simply terminate the lease.               





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