Merrill Lynch & Co., Inc. & Subsidiaries - Page 73




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                    2.  The 1987 Cross-Chain Sales of the Five                        
                    Subsidiaries, ML Interfunding, and Leasing                        
               Equipment                                                              
               Petitioner makes similar factual and legal arguments with              
          respect to the 1987 cross-chain sales.  Because the factual and             
          legal arguments are virtually identical for all of the 1987                 
          cross-chain sales except the one involving Vessel Leasing, we               
          shall consider them together, excluding only Vessel Leasing.                
               Like petitioner’s evidence regarding the 1986 cross-chain              
          sale, petitioner’s evidence regarding the 1987 cross-chain sales            
          focused almost exclusively on the lack of any binding commitment            
          or even an agreement in principle between petitioner and                    
          GATX/BCE, the ultimate purchaser of ML Capital Resources, on the            
          dates of the 1987 cross-chain sales.  Seven of the eight 1987               
          cross-chain sales occurred on March 30, 1987 (the five                      
          subsidiaries and ML Interfunding), and April 3, 1987 (Leasing               
          Equipment).  On those dates, GATX/BCE had not had any meaningful            
          opportunity to review the 3-volume offering memorandum or to                
          conduct its due diligence investigation, and had not                        
          contractually committed itself to buy ML Capital Resources’                 
          stock.  Neither the board of directors of Merrill Parent nor the            
          board of directors of GATX/BCE had approved the transaction.                
          Petitioner argued that the existence of these uncertainties                 
          precludes any finding that the cross-chain sale was part of a               
          firm and fixed plan to terminate ML Capital Resources’ actual and           






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