- 14 -
LIBOR Note value, set forth in Joint Exhibit 148-J(5).
For purposes of that valuation, Merrill valued the four
Fuji and Norinchukin LIBOR Notes held by Saba at
$36,215,000, and then added to that amount $2,035,000.
This $2,035,000 amount consisted of $1,500,000 of
private placement discount and a $535,000 additional
amount. Pepe’s notes (Ex. 136-J at BC010168) reflect
the valuation.
Bearing in mind the admonition in the Zelisko memorandum
that “there cannot have been any agreements, negotiations, or
understandings of any kind among the Partners”, we base our
evaluation of whether Brunswick actually transferred fees to ABN
upon the record as a whole. Saba I, slip op. at 17. Although
Brunswick was largely successful in abiding the warning in the
Zelisko memorandum and concealing its transfers to ABN, we are
convinced for the reasons discussed above that Brunswick did in
fact pay ABN to participate in the partnerships.
It simply defies reason to suggest that Brunswick overlooked
or was unaware that Merrill Lynch added the $535,000 fee to its
valuation of Saba’s LIBOR notes resulting in what petitioner
characterizes as an “inadvertent transfer” from Brunswick to ABN.
Brunswick must be charged with knowledge of the fee inasmuch as
petitioner stipulated that Merrill Lynch’s valuation letters were
provided to Saba and incorporated in Saba’s financial statements.
Petitioner also stipulated that Brunswick relied upon Merrill
Lynch’s valuation to determine the price that it would pay for 50
percent of Sodbury’s partnership interest. Saba I, slip op. at
38. One could reasonably expect that if the transfer were truly
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011