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 63




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               The equipment lease imposed an obligation upon Comdisco to               
          provide Andantech with annual reports, which, among other things,             
          contained information as to the location of the equipment.  CIG               
          provided Andantech with location reports relating to the equipment            
          on March 1, 1994, February 27, 1995, and February 28, 1996.  Ms.              
          Grossman received these reports.                                              
               The 40 mainframe computers in Andantech’s portfolio were                 
          identified by serial number in the location reports.  The computers           
          shown in the reports had the same serial numbers as those that were           
          on the 1993 bill of sale.  The location of the equipment (and the             
          sublessee) sometimes changed.  In light of the fact that the CIG              
          location reports reflected no changes in the serial numbers, Ms.              
          Grossman was unaware that Comdisco had substituted replacement                
          equipment for one of the 40 computers that Andantech purchased.               
          IX. Comdisco’s Exercise of Early Termination Options                          
               On April 25, 1996, Comdisco informed Andantech that it was               
          exercising its early termination option to purchase the equipment             
          in categories E through I (i.e., the IBM mainframes in the 9021               
          series).  On May 30, 1996, Comdisco received from Computer                    
          Information Resources (CIR) an appraisal of the equipment in these            
          five categories, valuing the computers at $11,444,000.                        
               Ms. Grossman asked Don Oram, an NEFI equipment manager, to               
          independently investigate the value of the equipment.  After                  
          reviewing several reports (Computer Price Watch and the Gartner               
          Group reports), on May 27, 1996, Mr. Oram informed Ms. Grossman               





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