- 96 -
Nothing in any of the papers related to the negotiations
indicate that Ms. Grossman (or for that matter Mr. Parmentier) ever
attempted to negotiate a purchase price for the computers in an
amount less than that set forth in Comdisco’s proposal. Similarly,
there is no evidence that Ms. Grossman (or Mr. Parmentier)
negotiated to increase the amount of the rent payable under the
lease, to reduce the amount of the cash to be invested, or to
reduce the interest rates payable on the notes.
Succinctly stated, there is no evidence of any arm’s-length
negotiations by anyone in the sale-leaseback transaction at issue.
Rather, the participants allowed Comdisco to arrange all aspects of
the transactions. Moreover, the record is devoid of evidence that
the purchase price was in any way determined with a true regard for
the profitability of the activity. Brannen v. Commissioner, 78
T.C. 471, 509 (1982), affd. 722 F.2d 695 (11th Cir. 1984); see also
Helba v. Commissioner, supra at 1005-1011. And the lack of arm’s-
length negotiations indicates that NEFI did not enter into the
transaction for a legitimate profit purpose.
ii. The Relationship Between the Selling
Price and the Fair Market Value
In this case, all but $15 million of the selling price was
financed by Comdisco. The transaction was arranged so that the
payments due on the financing were offset by the rents payable by
Comdisco. In fact, the rents were determined by reference to the
purchase price. Therefore, the selling price and the fair market
Page: Previous 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 NextLast modified: May 25, 2011