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(including intangible assets) to the foundation and claim
charitable contribution deductions for proportionate amounts of
the aggregate donation (Friendly Hills determination letter). In
addition, Mr. Grant was familiar with the annual Exempt
Organizations Continuing Professional Education Technical
Instruction Program manuals, including the manual for 1994, which
expressly contemplated a "charitable donation" as one method by
which a nonprofit corporation might acquire assets from an
existing group medical practice in connection with its
acquisition of the practice.13
C. Acquisition Transaction
1. In General
To effect Sutter Health's acquisition of the medical
practices of the UHMG physicians, including petitioners, who
wished to affiliate with it, a number of steps were taken, as
discussed below.
First, Sutter Health and the affiliating physicians arranged
for an appraisal of the "business enterprise value" of the to-be-
formed medical group, as well as a separate appraisal of the
tangible assets that would be transferred to SMF as part of the
acquisition. In April 1994, Sutter Health retained an investment
banking firm, Houlihan Lokey Howard & Zukin (Houlihan), to
13 See "Exempt Organizations Continuing Professional
Education Technical Instruction Program for FY 1994", Dept. of
Treasury, Internal Revenue Service, Training 4277-045, at 215-217
(7-93).
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