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that other knowledgeable witnesses could not have been found
among the living. In 1996, Credit Lyonnais, CDR, Generale Bank,
and CLIS appear to have been very large banking institutions. It
also appears that Credit Lyonnais and CDR were quasi-governmental
entities which were subject to considerable oversight by the
French government. It seems implausible that all direct
88(...continued)
Agreement on December 11, 1996, whereby among other
things CLIS contributed to an unrelated company formed
by Rockport Capital Inc. and called Santa Monica
Pictures LLC all its stock in Santa Monica Holdings
(and the $79.9 M$ debt of Santa Monica Holdings) in
exchange for 36.76% of the Preferred Interests of Santa
Monica Pictures LLC.
On the basis of this letter, petitioner contends that it is clear
that Mr. Jouannet believed that CLIS had not sold SMHC or the $79
million receivable but had entered into a partnership arrangement
with the Ackerman group. We cannot agree.
The letter itself merely discusses the form that the
transaction took, i.e., that CLIS entered into an exchange and
contribution agreement with SMP and contributed its SMHC stock
and the $79 million receivable. It does not address the more
cogent question of whether there was an understanding that CLIS
would exercise its put rights on Dec. 31, 1996. Moreover, in the
absence of some corroboration, we must question the letter’s
reliability. As discussed infra, we are not persuaded that Mr.
Jouannet’s interests, and those of CDR, were necessarily adverse
to the interests of the Ackerman group and SMP, at least insofar
as the tax characterization of the transaction was concerned.
Further, Mr. Jouannet, as a representative of CDR, was bound by
the confidentiality provision of the LLC agreement; any statement
to New MGM confirming a sale by CLIS of SMHC might be construed
as a breach of that agreement. (New MGM was not a party to the
CDR transaction, and any disclosure to that entity was not
covered under any of the exceptions in the confidentiality
provision.) Finally, Mr. Jouannet’s statement, insofar as it
might be construed to favor petitioner’s position, would appear
inconsistent with the testimony of Mr. Geary, discussed infra.
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