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agreements, petitioner sold to and leased back from the trustee
of the six grantor trusts in the aggregate petitioner’s entire
interest in AVS unit II, including the AVS unit II pollution
control facilities.
The 1984 lease and sublease, the 1984 bond indenture agree-
ment, the 1984 tax-exempt bonds, and the 1985 sale and leaseback
agreements were agreements reflecting an integrated plan of
interrelated and interdependent transactions or steps. Each of
those transactions or steps was necessary in order to effectuate
petitioner’s objective of transferring by sale or otherwise the
AVS unit II to one or more transferees and leasing that unit back
from such transferee(s).
Under the 1985 sale and leaseback, part of the total consid-
eration that the owner participant provided to petitioner to
acquire a percentage undivided interest in the AVS unit II
consisted of the owner participant’s assumption of that portion
of petitioner’s obligation to pay the 1984 sublease rent (i.e.,
to make payments when due of interest and principal on the 1984
tax-exempt bonds) which was proportionate to the percentage
3(...continued)
Each 1985 sale and leaseback agreement that petitioner and
the owner participant entered into was materially identical to
each of the other five 1985 sale and leaseback agreements.
Unless otherwise indicated, we shall for convenience refer only
to the 1985 sale and leaseback or the 1985 sale and leaseback
agreement and the owner participant. However, any such refer-
ences pertain to all six sale and leaseback agreements and all
six owner participants.
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