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 117




                                        - 98 -                                          
               RD Leasing was not liable to a third party for the debt.                 
          Unlike the transaction in Frank Lyon Co. v. United States, 435 U.S.           
          561 (1978), if Comdisco had failed to make its lease payments, RD             
          Leasing would not have had to provide its own capital to make                 
          mortgage payments to a third party.  If RD Leasing did not make its           
          final balloon payments on the equipment, Comdisco’s only remedy was           
          to retake the equipment.  Thus, RD Leasing had the option to                  
          abandon the equipment, leaving Comdisco no recourse against RD                
          Leasing.23                                                                    
               The transaction did not occur on a public market but rather in           
          an environment controlled by Comdisco and NEFI.  When the sale-               
          leaseback transaction involved herein was proposed, Mr. Hastings              
          used the M&S report to interpolate the values stated therein to               
          arrive at values relevant to the specific dates in the proposed               
          transaction.  He then presented these interpolated numbers to Greg            
          Barwick, one of M&S’s appraisers.  The cost of the computers, the             
          financing of the purchase price (including the interest rates), and           
          the rents, as well as the estimated residual values, were easily              
          manipulated to project a pretax profit.                                       
               NationsBank’s records show that the bank treated the                     
          “purchase” of the rents receivable as a loan to Comdisco and                  
          anticipated prepayment by March 28, 1994.  The bank’s records                 

               23   The equipment was Andantech’s only asset, and the                   
          Andantech interest was RD Leasing’s principal asset (RD Leasing,              
          however, was required to maintain sufficient investments to                   
          redeem Mr. Parmentier’s preferred stock).                                     




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