The Charles Schwab Corporation and Subsidiaries - Page 12

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          acquired Rose customer accounts was $12,951,000, which was                  
          adjusted to $12,587,000 as an allocation of tax basis under                 
          section 338.                                                                
               Deloitte allocated the value of Rose’s institutional                   
          customers, which represented a small portion of Rose’s total                
          customers (in actual numbers and revenue), between the intangible           
          assets denominated “Chase Vendor Agreements” and “Chase Priority            
          Marketing Access Agreement”.  The vendor and marketing agreements           
          were valued at $592,000 and $690,000, respectively, and were                
          assigned a tax basis of $575,000 and $671,000, respectively.                
               On April 30, 1989, Rose was merged into petitioner, and by             
          June 30, 1989, petitioner had withdrawn Rose’s trade name from              
          use.  By that same time, petitioner had closed all Rose’s offices           
          and sold Rose’s furniture and fixtures.  Approximately 25 of the            
          107 Rose employees continued their employment with petitioner,              
          and the others either refused offers or were terminated after the           
          acquisition.  Former Rose brokers who stayed on with petitioner             
          were required to service any retained Rose customers under                  
          petitioner’s service policies.  For example, it was Rose’s policy           
          to have a specific broker service a particular customer, whereas            
          under petitioner’s approach, customer representatives did not               
          typically have specific customers.                                          
               In determining the price to offer or pay for Rose,                     
          petitioner used comparable sales and discounted cashflow                    






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