- 11 - B. First Lease Strip Deal4 As to the first lease strip deal, the following complex multiparty equipment purchase, lease, and related transactions were entered into on November 1, 1994, November 30, 1994, December 2, 1994, and January 3, 1995. 1. On November 1, 1994, CLI sold, subject to the existing end-user leases, the equipment leased to K-Mart and Shared, along with some equipment leased to others, to Equity Resource Acquisition II (ERA), a limited partnership, for $13,919,451. ERA was a special-purpose entity created and controlled by CLI for the express purpose of accomplishing the purchase and sale of the leased equipment. In exchange for the leased equipment package, ERA assumed the debt incurred by CLI to finance the equipment purchase. ERA also issued a $2,307,500 secured recourse promissory note to CLI, payable within 60 days, with accrued interest at 10 percent. 2. In turn, on November 1, 1994, ERA sold the leased equipment for $15.05 million, subject to the existing end-user leases, to Capital Finance Partners (CFP), a limited partnership. The partners of CFP were: The Iowa Tribe--a 99-percent limited partner; CMACM--a .05-percent managing general partner; Crispin-- 4Although petitioner’s subject deductions were derived from the second lease strip deal, we detail the first deal for purposes of clarity and to provide a background for discussion of the second deal.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011