Andantech L.L.C., Wells Fargo Equipment Finance, Inc. (f.k.a. Norwest Equipment Finance, Inc.), Tax Matters Partner, and Wells Fargo & Co., A Partner Other Than the Tax Matters Partner, et al. - Page 12




                                        - 101 -                                         
          shown in the reports had the same serial numbers as those that were           
          on the 1993 bill of sale.  Ms. Grossman was unaware that Comdisco             
          had substituted replacement equipment for the equipment purchased             
          by the end user.                                                              
               When Comdisco exercised its early termination option, the 1996           
          bills of sale conveyed back to Comdisco the identical computers               
          that Andantech had acquired pursuant to the 1993 bill of sale.  The           
          serial numbers on the 1996 bills of sale were identical to those on           
          the 1993 bill of sale.  Thus, the 1996 bills of sale inaccurately             
          reflect that Comdisco never replaced any of the computers (i.e.,              
          did not substitute a different computer for any of the original               
          equipment).  Andantech never transferred title to the end user.               
          Comdisco treated the equipment as its own and transferred ownership           
          of the equipment to the end user.                                             
               We are also mindful that, as Dr. Schallheim points out, under            
          the schedule of rents, Andantech did not sell all of the rents to             
          NationsBank.  Comdisco should have paid $2,711,993 of rent to                 
          Andantech.  Petitioners’ expert, Mr. Fleming, included those rents            
          in his analysis of the profit potential.  Petitioners argue that              
          those rents should be included in evaluating the profit potential,            
          but they fail to explain why Andantech never sought to collect the            
          rents.                                                                        
               The low degree of adherence to the entities’ contractual                 
          terms, particularly those relating to the actual ownership and the            
          right to transfer ownership to a third party, indicates a lack of             





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