Merrill Lynch & Co., Inc. & Subsidiaries - Page 70




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               The written summary also confirmed that, although the sale             
          of ML Leasing had not yet been finalized, the sale was                      
          sufficiently mature that the establishment of a tax reserve for             
          the transaction was warranted.  In fact, the written summary                
          included a recommendation to the board of directors that a tax              
          reserve specifically geared, in part, to the extraordinary basis            
          adjustment resulting from the section 304 redemption be approved.           
               Petitioner seeks to minimize the impact of the written                 
          summary by pointing out that the summary was prepared for a board           
          of directors meeting that occurred 4 days after the cross-chain             
          sale.  Although petitioner is correct regarding the chronology,             
          petitioner offered us no proof that the plan suddenly sprang to             
          life after the cross-chain sale had occurred, or that the cross-            
          chain sale and the later sale of ML Leasing were unrelated.  In             
          fact, petitioner introduced very little evidence regarding the              
          development, review, and approval of the plan reflected in the              
          written summary, even though the plan was the product of                    
          petitioner’s own internal planning.                                         
               The July 28, 1986, board of directors meeting was a regular            
          board of directors meeting.  Ordinarily, a corporation is                   
          required by its bylaws and/or by State law to provide reasonable            
          advance notice to its directors of a regular board meeting.  We             
          believe that it is reasonable to infer from this record that the            
          plan outlined in the written summary and presented to Merrill               






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