-12-
LARO, Judge: These cases were consolidated for purposes of
trial, briefing, and opinion. In docket No. 5759-95, First
Chicago Corp. (FCC) and its affiliated corporations, one of which
was a corporation formerly known as the First National Bank of
Chicago (FNBC), petitioned the Court to redetermine respondent’s
determination of deficiencies of $1,661,112 and $2,956,794 in the
affiliated group’s consolidated Federal income taxes for 1990 and
1991, respectively. In docket No. 5956-97, First Chicago NBD
Corp., the successor in interest to FCC and affiliated
corporations, petitioned the Court to redetermine respondent’s
determination of a $95,156,499 deficiency in the 1993
consolidated Federal income tax of FCC and its affiliated
corporations. The latter petition placed in issue a nonnotice
year, 1992, by alleging entitlement for that year to adjustments
which would affect the notice year 1993.
As relevant herein, the deficiencies stem from FNBC’s claim
to “swap fee carve-outs” of $5,468,418 for 1990, $3,543,182 for
1991, $4,294,471 for 1992, and $5,799,724 for 1993.1 As to swaps
(defined infra p. 17) for which it was a party, FNBC valued these
swaps at the mid-market values which it computed on its version
of a computerized system known as the Devon Derivatives System
(Devon system) (as discussed infra, FNBC’s midmarket valuation
1 Whereas the parties sometimes use the term “adjustment” to
refer to the carveouts discussed herein, so do we.
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