Countryside Limited Partnership, CLP Holdings, Inc., Tax Matters Partner - Page 54




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          structure the BP-AIG notes in accordance with instructions                  
          received from the prospective client’s representative, and that,            
          after issuance, AIG was willing to modify those notes in                    
          accordance with the purchaser’s wishes, even at a possible                  
          financial loss.                                                             
               We do not agree that any of the documents respondent refers            
          to constitute evidence of an “arrangement” that would render the            
          AIG notes marketable under section 731(c)(2)(B)(ii).                        
               AIG’s willingness to “consider” a modification or repurchase           
          of the AIG notes does not constitute evidence of an “arrangement”           
          to convert the AIG notes into cash or marketable securities at              
          MP’s request, as it would be no more than standard business                 
          practice for a bank or financial institution to at least consider           
          a customer’s request to modify the terms of its notes.  Morever,            
          respondent’s counsel has made no representations to the Court               
          that she is able to get Mr. Nelson or anyone else on behalf of              
          AIG to testify that it was AIG’s “practice” to renegotiate the              
          terms of or to repurchase its notes.                                        
               Nor did AIG’s willingness to structure and, subsequently,              
          restructure the BP-AIG notes in accordance with the customer’s              
          wishes at a probable overall loss (on account of transaction                
          costs) indicate that the parties were not operating at arm’s                
          length then or later in connection with the AIG notes.  An e-mail           
          from Mr. Nelson makes clear that that willingness (and, in                  
          particular, the willingness to modify the note terms) was a                 







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