Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 61

                                        -146-                                         
          being partners with the banks would put them in a better position           
          to acquire that library.  Other than his self-serving testimony,            
          petitioner points to no evidence to suggest that the parties to             
          the transaction either discussed or contemplated any dealings               
          involving the general CDR library.  In fact, there is no                    
          indication that the Ackerman group was given any sort of                    
          preference in 1997 when CDR was being sold.102                              
               Petitioner also testified that CDR asked for the $5 million            
          advisory fee in connection with the remaining film titles in the            
          CDR library as a “guaranty payment” to enable the Ackerman group            
          to work with CDR.  He testified that the Ackerman group was                 
          willing to pay that fee “because we thought we would be able to             
          get our hands on a much larger library, and certainly we did                
          pursue it at a later time.”  The advisory fee agreement                     
          indicates, however, that the advisory fee was paid specifically             
          as an inducement for CDR, Generale Bank, and CLIS to execute the            
          letter agreement and exchange and contribution agreement.  None             
          of the various legal documents that the parties exchanged                   
          contains any reference to a guaranty or any assurances regarding            
          the CDR library.  One would expect some legal representations               
          regarding this matter if the $5 million advisory fee was in fact            
          paid as a guaranty for the CDR library.                                     


               102 According to petitioner, Generale Bank and CLIS were               
          still partners in SMP at that time.                                         





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