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persuaded that it is helpful to the Court in understanding the
evidence or determining a fact in issue.
In the first instance, we question the relevance and
reliability of Mr. Shapiro’s “economic reality” analysis in
evaluating CLIS’s contribution of film rights to SMHC. Mr.
Shapiro concluded, with little elaboration, that CLIS contributed
the film rights to SMP instead of SMHC. Because the film rights
were contributed to SMP, Mr. Shapiro concluded that SMHC had no
value in those assets as of December 11, 1996. In reaching these
conclusions, Mr. Shapiro superimposes his view of “economic
reality” to a level that wholly ignores the legal effect (apart
from tax considerations) of CLIS’s contribution to SMHC and
SMHC’s existence as a separate corporate entity from SMP. SMHC,
as opposed to SMP, was the legal owner of whatever film rights
CLIS contributed to it and continued to hold those rights until
its merger with Troma. Presumably, since the film rights resided
in SMHC after the CLIS contribution, debtholders would be
entitled to whatever value those film rights had, if any. Mr.
Shapiro concludes, however, that because the film rights were in
SMP, SMHC had no assets of value and therefore the receivables
from Generale Bank and CLIS were worthless. Under the
circumstances, Mr. Shapiro’s views of “economic reality” are
largely academic, disregard elements of CLIS’s contribution, and
cannot form the basis for determining the facts in issue. Those
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