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rights to the contingent payment amount, as part of an open
transaction, the distribution rights in Amendment No. 3 are
redundant and unnecessary. The banks were already entitled to
any value that might be realized on the Carolco securities.
There was no need to “rejoin” SMP to receive their contingent put
price.
Further, it is unclear whether Generale Bank or CLIS ever
acceded to the execution of Amendment No. 3. Petitioner claims
that he executed this amendment to the SMP LLC agreement after
speaking to Mr. Jouannet sometime in 1997. Mr. Lerner claims
that he instructed his attorneys at Shearman & Sterling to
prepare this amendment, which he then signed as manager of SMP.
No representative of Generale Bank or CLIS signed this amendment.
There is no evidence that Generale Bank or CLIS was aware of this
amendment. Mr. Jouannet never asked Mr. Geary to review
Amendment No. 3, even though Mr. Geary testified that Mr.
Jouannet would have asked him to review such a document prior to
having CDR’s interest affected by it.
2. Economic Benefits for the Ackerman Group
“Economic substance depends on whether, from an objective
standpoint, the transaction was likely to produce economic
benefits aside from tax deductions.” Winn-Dixie Stores, Inc. v.
Commissioner, 113 T.C. at 285 (citing Kirchman v. Commissioner,
862 F.2d at 1492; Bail Bonds by Marvin Nelson, Inc. v.
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