- 17 -
dispose of Merrill Lynch’s proprietary lease business culminating
in the sale of ML Leasing’s stock.
The stated purpose of the presentation was to secure the
board’s approval to enter into a letter of intent with the
purchaser12 and to secure the board’s authorization for:
the Executive Committee to approve the final details of
the proposed transaction in accordance with the letter
of intent, subject to closing adjustments and unforseen
contingencies arising from negotiating a final
agreement in early October, up to a maximum reduction
of $20 million.
The written summary informed the board of directors that
“due to the exhaustion of tax benefits, many of * * * [ML
Leasing’s] leases begin to produce taxable income in 1987, with
the remainder ‘turning around’ in 1988. Accordingly, it is an
opportune time to sell our Principal Investments line of business
to an appropriate purchaser.” The summary also informed the
board of directors that because it was not Merrill Parent’s
intent to withdraw from all aspects of the leasing business,
Merrill Parent was removing the 1986 retained assets from ML
Leasing before ML Leasing’s stock was sold in two steps: (1) The
1986 retained assets had been sold to ML Asset Management for
approximately $57 million; and (2) ML Leasing will declare a $115
12The presentation represented to the board of directors
that “Once both parties have signed the letter of intent, the
sales price will be firmly established subject only to changes in
the residual value by the appraisers. Moreover, even the impact
of residual value appraisals will be limited to $14 million.”
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011