- 8 -
MEMORANDUM FINDINGS OF FACT AND OPINION
THORNTON, Judge: These consolidated cases stem from
transactions that occurred in the wake of the 1996 sale of the
legendary motion picture company Metro-Goldwyn-Mayer (MGM) by the
French banking giant Credit Lyonnais.
Peter Ackerman, his business partner Perry Lerner, and their
related entities (collectively, the Ackerman group) had helped
organize a consortium which made a bid to purchase MGM from
Credit Lyonnais. The consortium lost out to Kirk Kerkorian’s
winning bid. The Ackerman group then set out to acquire MGM’s
parent company, Santa Monica Holdings Corp. (SMHC), which Credit
Lyonnais still owned.
SMHC was largely devoid of assets; it owed about $1 billion
to Credit Lyonnais and its cluster of subsidiaries, adjuncts, and
associated companies (the Credit Lyonnais group).1 There were,
however, tantalizing tax attributes: Credit Lyonnais’s purported
tax basis in the SMHC indebtedness was about $1 billion; its
purported tax basis in the SMHC stock was about $665 million.
1 This debt represented part of the approximately $2 billion
that the Credit Lyonnais group had previously lent or advanced to
MGM during its brief, unprofitable relationship with MGM, first
as lenders to MGM and then, after foreclosing, as owners of MGM.
Credit Lyonnais had transferred the approximately $1 billion of
debt from the MGM operating company to Santa Monica Holdings
Corp. (SMHC) (or more precisely to its predecessor, MGM Group
Holdings Corp.) partly to facilitate the 1996 sale of the MGM
operating company to Kirk Kerkorian.
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