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each existing lease had been declining in value since the lease
was entered into; (3) the equipment could only be expected to
continue to decline in value; (4) the existing end-user leases
each had a few years to run before CFX’s master lease residual
interest periods and then petitioner’s purported over lease
residual interest periods with respect to that equipment would
have begun;20 (5) the first 2 years of the master lease residual
interest in the K-Mart end-user lease equipment and the first 6
months of the master lease residual interest in the Amoco end-
user lease equipment were “sold” to Residco; and (6) no lease
arrangement with a potential user was in place for the period
following the termination of the existing leases. Any such lease
arrangements would have to be negotiated at some future point
either with the equipment’s current end user or with another
possible user.
In that regard, one of petitioner’s experts acknowledged
that the projected future monthly rental income to be earned
under (1) the master lease residual interests and (2) the over
lease residual interests would be substantially less than the
monthly rental income due under the existing end-user leases on
that equipment.
20The existing Shared and K-Mart end-user leases expired no
later than Mar. 29 and Jul. 31, 1997, respectively. The existing
HIP NY end-user lease expired on Dec. 31, 1997; the existing
Martin Marietta end-user lease expired on May 31, 1997; and the
existing Amoco end-user lease expired on Mar. 31, 2000.
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