Countryside Limited Partnership, CLP Holdings, Inc., Tax Matters Partner - Page 7




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               Sometime in or about October 2000, Countryside borrowed                
          $8.55 million from Columbus Bank & Trust Co. (CB&T), and, on                
          October 30, 2000, (1) Countryside contributed that entire amount            
          in cash to CLPP in exchange for a 99-percent interest in CLPP,              
          and (2) CLPP contributed $8.5 million in cash to MP in exchange             
          for a 99-percent interest in MP.  Therefore, on or about October            
          30, 2000, Countryside was a 99-percent shareholder in CLPP, and             
          CLPP was a 99-percent shareholder in MP.                                    
               On or about October 30, 2000, MP borrowed $3.4 million from            
          CB&T.  Both CB&T’s $8.55 million loan to Countryside and its $3.4           
          million loan to MP were guaranteed by Mr. Winn, and the loan to             
          Countryside was secured by the Manchester property.  Both loans             
          provided interest at an annual rate equal to the London Interbank           
          Offering Rate (LIBOR) plus 175 basis points.  The due date was              
          May 1, 2001, for the $8.55 million loan to Countryside and                  
          November 1, 2003, for the $3.4 million loan to MP.                          
               On or about October 31, 2000, MP used the $8.5 million                 
          received from CLPP and the $3.4 million borrowed from CB&T to               
          purchase four privately issued notes from AIG Matched Funding               
          Corp. (AIG) in the aggregate principal amount of $11.9 million              
          (the AIG notes).  The AIG notes were for principal amounts of               
          $6.2 million, $2.6 million, $2.3 million, and $800,000.  Each               
          note became due on October 31, 2010, although the holder of each            
          note possessed a right of redemption exercisable, in whole or in            
          part, on the fifth interest payment date (April 30, 2003).  Each            
          note provided for interest at an annual rate equal to LIBOR minus           






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