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ends and following up with White & Case and Mr. Jouannet to
complete the Ackerman group’s files.
On December 11, 1996, Mr. Rhodes faxed to Mr. Wofford at
White & Case a revised draft of a “Basis Chronology”, which
contained an analysis of the bases of all the assets involved in
the transaction between Rockport Capital and CDR. The basis
chronology included a section analyzing the basis of the MGM
Group Holdings stock, and it listed three transactions affecting
the basis of MGM Group Holdings’ stock: (i) MGM Holdings’s
purchase of 98.5 percent of MGM Group Holdings stock in the 1992
foreclosure sale for $483,489,000; (ii) Credit Lyonnais’s
acquisition of Sealion’s 1.5-percent stock interest in MGM Group
Holdings that had been pledged to Credit Lyonnais as security for
a $150 million loan to Sealion; and (iii) MGM Holdings’s
contribution of Carolco securities in the face amount of $60
million to MGM Group Holdings on September 28, 1996.
On May 12, 1997, Mr. Wofford sent a facsimile cover sheet to
Mr. Rhodes which stated:
This letter is to confirm that, to our knowledge,
none of Credit Lyonnais International Services
(“CLIS”), Generale Bank Nederland (“GB”), or any
affiliate of Credit Lyonnais S.A. or Consortium de
Realisation (“CDR”) derived any U.S. tax benefit from
the contribution of the stock of Santa Monica Holdings
Corporation or the Holdings - CLIS Debt (as defined in
the Exchange and Contribution Agreement (the
“Agreement”) by and among Santa Monica Pictures, L.L.C.
(the “Company”), CDR, CLIS, GB and Rockport Capital
Incorporated, dated as of December 11, 1996) pursuant
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