-309-
Carolco Stock with a view towards making an economic
profit apart from tax consequences.
42. The Third Amendment was duly executed by the
Company’s Manager so that the Company and each of its
Members are bound by the provisions of the Third
Amendment under applicable local laws.
For the reasons discussed in this opinion, we conclude that
CDR, Generale Bank and CLIS did intend for the banks to exercise
their put rights and to exit SMP as expeditiously as possible,
that Mr. Lerner had this same understanding, and that the
interests of all parties were directed towards the banks’
transferring their built-in losses to the Ackerman group for a
$10 million cash payment. Because the Chamberlain Hrdlicka
opinion is grounded on erroneous factual assumptions that Mr.
Lerner knew were untrue, we cannot agree that he reasonably
relied on that opinion in preparing SMP’s and Corona’s 1997 and
1998 partnership tax returns.
The last section of the opinion, which contains Chamberlain
Hrdlicka’s legal conclusions, is two pages long. Chamberlain
Hrdlicka concludes that SMP had a $551,600,856 basis in the SMHC
stock, a $79,912,955.34 basis in the $79 million receivable that
CLIS contributed, and a $975,494,909.84 basis in the $974 million
in receivables that Generale Bank contributed. Chamberlain
Hrdlicka reaches these conclusions without any legal analysis or
citation to the Code, the regulations, or caselaw. Instead,
Chamberlain Hrdlicka states simply: “In reaching our opinions,
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