Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 143

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          the receivables resulted in substantial losses that passed                  
          through from SMP to Somerville S Trust to Mr. Ackerman:  A                  
          $147,486,000 loss on the sale of the $150 million receivable in             
          1997; a $80,190,418 loss on the sale of the $81 million                     
          receivable in 1998; and a $4,097,577 loss on the sale of the $79            
          million receivable in 1997.  But these losses were not enough for           
          the Ackerman group.                                                         
               In 1997, Mr. Lerner actively marketed a tax deal to                    
          Imperial, which was searching for tax losses to offset                      
          substantial gains that it expected to realize.  Mr. Lerner was a            
          director at Imperial and offered Imperial a stake in SMP’s                  
          purported “film business.”  From the beginning, however, Imperial           
          was interested in one thing only, a piece of the more than $1               
          billion in built-in losses that SMP possessed.  Mr. Lerner                  
          proposed that Imperial would purchase a 25-percent ownership                
          interest in SMP; upon disposal of SMP’s high-basis assets,                  
          Imperial would be allocated approximately $400 million in losses.           


               164(...continued)                                                      
          other dealings with TroMetro and Mr. van Merkensteijn.  For                 
          example, on Dec. 7, 1998, SMP purportedly purchased a 50-percent            
          interest in Railcar Management Partners, LLC, which Mr. van                 
          Merkensteijn owned, for $1.4 million (approximately the same                
          amount that Mr. van Merkensteijn paid altogether for his                    
          purchases of the receivables).  Given Mr. van Merkensteijn’s                
          close relationship with Mr. Lerner, evidenced in part by his                
          sharing office space with Crown Capital, we cannot foreclose the            
          possibility that SMP funneled back Mr. van Merkensteijn’s                   
          purchase payments or “financed” TroMetro’s purchases of the                 
          receivables in 1997 and 1998.                                               





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