Saba Partnership, Brunswick Corporation, Tax Matters Partner - Page 13




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          represented additional remuneration to Sodbury.  Petitioner’s               
          objection states in pertinent part:                                         
               Respondent neglects to state that it was Pepe who added                
               the $535,000 to the value of the LIBOR notes, without                  
               informing Brunswick.  Petitioner agrees that this                      
               valuation resulted in a transfer of wealth from                        
               Brunswick to Sodbury, however, it would not be accurate                
               to characterize the inadvertent transfer as                            
               “remuneration”.                                                        
                                                                                     
               Under the circumstances, we assume that petitioner’s                   
          position remains that Brunswick was unaware of the aforementioned           
          fee.  In particular, the parties’ first stipulation of facts                
          addressed Merrill Lynch’s valuation of Saba’s LIBOR notes in                
          pertinent part as follows:                                                  
                    265.  * * * The valuation letters dated July 13,                  
               1990 [Jt. Ex. 148-J(5)] and August 17, 1990 [Jt. Ex.                   
               148-J(8)] and Saba’s financial statements consistent                   
               with such letter included an additional amount of                      
               $535,000 added to Merrill’s calculated value of the                    
               LIBOR Notes.  The valuation letter dated September 14,                 
               1990 [Jt. Ex. 148-J(10)] and Saba’s financial statement                
               consistent with such letter included an additional                     
               amount of one-fourth of the $535,000, or $133,750,                     
               added to Merrill’s calculated value of the LIBOR Notes.                
                    266.  Brunswick contends that it was not aware                    
               that the July 13, 1990, August 17, 1990, and September                 
               14, 1990 valuation letters included an additional                      
               amount of $535,000 (or a pro rata portion thereof, in                  
               the case of the September 14 letter) added to Merrill’s                
               calculated value of the LIBOR Notes.  Any references to                
               this additional amount in this Stipulation are not                     
               intended as a stipulation that Brunswick was aware of                  
               this additional amount.  Respondent does not agree with                
               Brunswick’s contention.                                                
                    *     *     *     *     *     *     *                             
                    272.  For purposes of computing the price of the                  
               July 13, 1990 purchase, the partners used Merrill’s                    





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