Estate of Howard Gilman, Deceased, Bernard D. Bergreen and Natalie Moody, Executors - Page 7

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          cash bequests totaling $30,565,000 in May 1998.  GIC borrowed               
          $30,565,000, which the estate borrowed from GIC to pay the cash             
          bequests.  GIC and the estate were illiquid at that time.                   
               Several months after decedent died in 1998, Bergreen                   
          arranged for a $90 million line of credit so GIC could                      
          consolidate loans to help sell the GIC businesses.  GIC and the             
          estate were still illiquid in October 1998.  On October 3, 1998,            
          GIC borrowed $6 million, which it gave to the estate to pay some            
          of its Federal and State estate taxes.                                      
               2.   Transfer of GIC Stock, Assets, and Liabilities to HG              
                    and HG Subsidiaries                                               
               Late in 1998, Bergreen received tax advice that, by                    
          transferring stock, assets, liabilities, and businesses of GIC              
          and its subsidiaries from the estate to a newly organized limited           
          liability company and its subsidiaries through a series of                  
          mergers tax free under section 368 (the restructuring), the                 
          estate could save $160 million in capital gains tax that would              
          result if the estate sold GIC’s assets and businesses.  To                  
          accomplish those tax savings, (1) the restructuring had to be               
          completed before January 28, 1999, see sec. 1.337(d)-4(e), Income           
          Tax Regs.; and (2) Gilman Building Products could not be sold for           
          5 years because of the continuity of business requirement, see              
          sec. 1.368-1(d), Income Tax Regs.                                           

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