Saba Partnership, Brunswick Corporation, Tax Matters Partner - Page 12




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               The August 7, 1989, memorandum by den Baas unambiguously               
          states that ABN will receive a specified payment from its                   
          corporate partner because the partnership’s proposed investments            
          would not provide ABN with an adequate return on its capital.               
          The February 15, 1990, and June 19, 1990, memoranda by den Baas             
          issued with regard to ABN’s participation in Saba and Otrabanda,            
          respectively, echo the proposition that ABN will receive payments           
          from its corporate partner; i.e., Brunswick.  Consistent with the           
          foregoing, we note that den Baas acknowledged at trial that he              
          understood from the start that the partnerships’ investments                
          would not provide ABN with the return it required on its funds.             
          These factors demonstrate to our satisfaction that ABN expected             
          that Brunswick would provide remuneration or fees in exchange for           
          ABN’s participation in the partnerships.                                    
               There is also ample evidence in the record that Brunswick              
          transferred fees to ABN.  We first observe that petitioner is               
          essentially mum with regard to the $535,000 amount that Merrill             
          Lynch characterized as a fee and added to its valuation of Saba’s           
          LIBOR notes.  The addition of this fee to the value assigned to             
          Saba’s LIBOR notes had the effect of inflating the price that               
          Brunswick paid ABN (through Sodbury) for 50 percent of its Saba             
          partnership interest.                                                       
               Petitioner’s reply brief includes an objection to                      
          respondent’s proposed finding of fact that the $535,000 amount              






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