- 20 -
percent of the interest savings attributable to such refinancing,
i.e., by $2,976,600.12
Pursuant to the modified 1985 sale and leaseback agreements,
in 1995 petitioner paid $54,672.28 to Mudge, Rose for services
rendered as bond counsel and other legal services associated with
the refinancing of the 1984 tax-exempt bonds, $40,218.22 to
Sherman & Sterling for legal services associated with the refi-
nancing of such bonds, $3,499 to Bingham, Dana & Gould for legal
services associated with representing the trustee during the
refinancing of such bonds, $2,255,000 to First National Bank of
Chicago for the redemption premium due on the redemption of such
bonds, $14,595.88 to Morgan Stanley for services associated with
the issuance of the 1995 tax-exempt bonds, and $17,896.08 to
Arthur Andersen for a comfort letter associated with the issuance
of such bonds.
Petitioner paid the expenditures described above in order to
modify and enhance the 1985 sale and leaseback agreements so that
petitioner’s aggregate minimum annual basic rent obligation under
those modified agreements would be substantially less than its
minimum annual basic rent obligation under the 1985 sale and
leaseback agreements.
In Forms 1120, U.S. Corporation Income Tax Return, for the
taxable years indicated, petitioner deducted the following
12See supra note 9.
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