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 43




                                                    - 24 -                                                      
                   Ms. Grossman reviewed the September Projections.  The                                        
             September Projections specifically forecasted that:  (1) If                                        
             Comdisco exercised an early termination option under the lease, the                                
             partnership would get a pretax return of 9.0 percent, and RD                                       
             Leasing would get a pretax return of 6.6 percent and an after-tax                                  
             return of 101.5 percent; and (2) if Comdisco exercised a final                                     
             termination option under the lease, the partnership would get a                                    
             pretax return of 15.1 percent, and RD Leasing would get a pretax                                   
             return of 14.0 percent and an after-tax return of 99.5 percent.                                    
                   A copy of the M&S appraisal report dated September 28, 1993,                                 
             was given to Ms. Grossman.   CIG provided two additional appraisal                                 
             reports, also dated September 28, 1993, one from Manufacturers’                                    
             Appraisal Co. (MAC) and the other from Appraisal Resources                                         
             International (ARI).                                                                               
                   CIG paid for the M&S, MAC, and ARI appraisals.10   Ms. Grossman                              
             was aware that the residual value forecasts of the IBM mainframe                                   
             computers in the M&S, MAC, and ARI appraisal reports were higher                                   
             than those of industry publishers, such as Daley Marketing Corp.                                   
             (DMC), International Data Corp. (IDC), and the Gartner Group.  On                                  
             the basis of her own experience, Ms. Grossman believed that                                        
             forecasts of IDC and the Gartner Group tended to be overly                                         
             conservative.                                                                                      


                   10     According to Ms. Grossman, Ms. Ortmann, Mr. Renner, and                               
             petitioners’ expert Thompson Ryan, it is common for the packager                                   
             of a leasing transaction (here, CIG) to pay the appraisal fees.                                    




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