-24- On July 31, 1998, CRG purchased from Starwood the remaining 39.45-percent interest (39.45-percent interest) in the 1998 Amtel equipment for $5,814,720.10, and CRG leased the 39.45-percent interest back to Starwood. Pursuant to promissory notes dated July 31, 1998, CRG promised to pay Starwood $5,346,686.52 and $53,932.54. Also on July 31, 1998, LCL purchased the 39.45-percent interest (subject to the lease) from CRG for $5,814,720.10. Pursuant to promissory notes dated July 31, 1998, LCL promised to pay CRG $5,310,887.56 and $53,832.54. No individual member of LCL signed or guaranteed these notes, the first of which stated it was recourse to the extent of $2.75 million and that payments of principal and interest would be applied to the recourse portion before the nonrecourse portion. The second note stated it was nonrecourse. For each of its taxable years ended in 1998 through 2001, LCL reported as to the 1998 Amtel equipment the following amounts of lease income, interest expense, depreciation, net “G&A” expense and interest income, and loss: 1998 1999 2000 2001 Lease income -0- $1,987,157 2,167,807 $2,167,807 Interest expense ($156,167) (971,811) (877,785) (786,273) Depreciation (2,948,385) (4,717,416) (2,830,450) (1,698,270) Net G&A expense and interest income -0- 4,047 32,922 13,815 Loss 3,104,552 3,698,023 1,507,506 302,921Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Next
Last modified: May 25, 2011