Free Response to Proposed Findings of Uncontroverted Fact - District Court of Federal Claims - federal

Case 1:05-cv-00231-EJD

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

JZ Buckingham Investments LLC as Tax Matters Partner of JBJZ Partners, a South Carolina general partnership, Plaintiff, v. United States of America, Defendant.

§ § § § § § § § § § §

Case No. 05-231 T Chief Judge Edward Damich

UNITED STATES' APPENDIX OF EXHIBITS
Pursuant to RCFC 56(h)(2), defendant is relying upon the following exhibits, Govt. Ex. 1 through 52, in its response to Plaintiff's Proposed Findings of Uncontroverted Facts and in support of the United States' Proposed Additional Findings of Uncontroverted Facts with respect to Plaintiff's Motion for Partial Summary Judgment as to the Validity of Treasury Regulation § 1.752-6. In addition, the United States relies upon the tax returns marked as Govt. Exs. 53 through 56, which to be filed separately.

Govt. Date Description Source Ex. # 1 10/18/99 Email, with attachments, dated DB October 18, 1999 from Craig Brubaker of Deutsche Bank Alex Brown ("DBAB") to Erwin Mayer, an attorney with J&G, concerning a "format "similar to the treasury short routine for a digital swap transaction."

Bates Range Pages of from Source App. DB-DOJ-COBRA- Part 1/8 at 00030051 to DBpp1-12 DOJ-COBRA00030061

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Govt. Date Description Source Ex. # 2 10/22/99 Email, with attachment, dated October E&Y 22, 1999, which includes an email from Paul Daugerdas of J&G, to Brian Vaughn of E&Y, with attachment, under the subject line "Draft Implementation Steps." 3 10/22/99 Email, dated October 22, 1999, from J&G Paul Daugerdas of J&G, forwarding the same attachment to BDO Seidman LLP at the email address "[email protected]". 4 10/22/99 E&Y email, dated October 22, 1999, J&G from Brian Vaughn of E&Y with the subject line "COBRA pricing" reporting, inter alia, his recent communications with Dan Brooks of DB regarding the proposed COBRA Product. 5 10/26/99 Email dated October 26, 1999, from E&Y Brian Vaughn of E&Y, under the subject line "Products." 6 10/27/99 Facsimile (totaling 23 pages) dated E&Y October 27, 1999, from Paul Daugerdas of J&G to Robert "Bob" Coplan, Richard Shapiro, and Ray Knight, all of E&Y, transmitting a J&G memorandum dated October 1999 on the "Tax Consequences of Contribution of Option Spread to Partnership or Corporation." E&Y 7 11/05/99 Facsimile (101 pages) dated November 5, 1999, of J&G opinion on COBRA transaction, marked "DRAFT" EY 8 11/08/99 E&Y email dated 10/9/99 from Coplan of E&Y to VIPER members, subject line "Reliance on tax opinion - cases" with attachment "tax opinions neg.doc."

Bates Range from Source DOJ 007914 to DOJ 007917

Pages of App. Part 1/8 at pp13-17

JG-NC064506 to JGNC064509

Part 1/8 at pp18-22

2003EY001767

Part 1/8 at pp23-24

DOJ-000441 to DOJ-000442.

Part 1/8 at pp25-27

2003EY001516 to Part 1/8 at 2003EY001538 pp28-51

DOJ008601 to DOJ008702

Part 2/8 at pp52-121

2003EY007852 to Part 2/8 at 2003EY007854 pp122-125

9

11/11/99 E&Y email dated November 11, 1999, from Melinda Merck of E&Y to the members of E&Y's VIPER and Quckstrike Teams, under subject line "Revised COBRA Spreadsheets and Slides", with copies attached

EY

2003EY003750 2003EY003767

Part 2/8 at pp126-144

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Govt. Date Description Ex. # 10 11/12/99 Email, with attachment, dated November 12, 1999, from Robert Coplan of E&Y to Paul Daugerdas of J&G with the subject line "Brown & Wood Involvement," forwarding Paul Daugerdas a copy of a Brown & Wood ("B&W") opinion, entitled "Model Opinion....". 11 11/15/99 E&Y email dated November 15, 1999, from Richard Shapiro to E&Y's "Quickstrike Team" re Implementation of COBRA strategy

Source J&G

Bates Range from Source JG-NC047817 to JG-NC047885

Pages of App. Part 3/8 at pp145-214

E&Y

2003EY000864 and 2003EY105642

Part 3/8 at pp215-217

12

13

14

15

11/18/99 E&Y email dated November 18, 1999, from Carl Rhodes of E&Y, subject line "Cobra," with form documents for implementation of COBRA product, including EY Nondisclosure Agreement, J&G Confidentiality Agreement, COBRA Powerpoint, E&Y COBRA engagement letter, and COBRA Client Questionaire 12/27/99 Email dated December 27, 1999 from David Parse of Deutsche Bank Alex Brown ("DBAB") to Carrie Yackee of DBAB forwarding an attachment named "Paul D 1999 Digital Options Ma.." [Note: This document was produced to the United States by DB in response to the United States' document subpoena bates marked from. The pages have been reorganized so that the printed details for the each transaction are now visible sequentially; the names of the non-COBRA participants have been redacted] 12/28/99 Facsimile (3 pages) dated December 28, 1999, from Patrick O'Daniel of J&G to Paul Daugerdas of J&G forwarding an attachment entitled "Revised Legal Fee Allocation Ernst & Young Client Transactions" 02/22/00 Email dated February 22, 2000, from Melinda Merck of Ernst & Young, LLP ("E&Y") to Amy Keating of E&Y providing Ms. Keating with an attached list detailing the following information for each of 15 listed COBRA transactions:

E&Y

DOJ-001008 to DOJ-001031

Part 4/8 at pp218-242

DB

DB-DOJ-COBRA- Part 4/8 at 00044432 to DB- pp243-278 DOJ-COBRA00044466

JG

JG-NC055932 to JG-NC055934

Part 4/8 at pp279-282

E&Y

DOJ 0000851 to DOJ 000853

Part 4/8 at pp283-286

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Govt. Date Description Ex. # 16 06/07/01 E&Y email dated June 7, 2001, from Robert Coplan of E&Y with the subject line "COBRA." 17 11/03/99 E&Y's "COBRA Action Work Plan (Revised 11/3/99)" filled-in for Carmel Partners COBRA transaction 18 11/05/99 E&Y's "COBRA Action Work Plan (Revised 11/5/99)" 19 11/18/99 E&Y's "COBRA Action Work Plan (Revised 11/18/99)" 20 11/19/99 E&Y's "COBRA Action Work Plan (Revised 11/19/99)" 21 11/10/99 E&Y email dated November 10, 1999, from Melinda Merck of E&Y to the members of E&Y's VIPER tax products team, with an attached COBRA Client Information Questionaire form. 22 11/10/99 COBRA Client Information Questionaires for other individual participants 23 10/22/99 Facsimile (two pages) dated October 22, 1999 from Grady P. Dickens of the law firm Scheef & Stone, LLP ("S&S"), forwarding to Paul M. Daugerdas of J&G, for review and approval, a copy of a proposed nondisclosure agreement form for the COBRA strategy. 24 10/29/99 E&Y email dated October 29, 1999, from Robert Coplan of E&Y. 25 03/08/00 J&G email dated March 8, 2000, from Donna Guerin of J&G to Amy Keating of E&Y, re COBRA

Source E&Y

Bates Range from Source DOJ049188 TO DOJ049190 DOJ03781 to DOJ03785 DOJ054573 to DOJ054577 DOJ 001091 to DOJ-001095 DOJ004024 to DOJ004028 2003EY003742 2003EY003743.

Pages of App. Part 4/8 at pp287-290 Part 4/8 at pp291-296 Part 4/8 at pp297-302 Part 4/8 at pp303-308 Part 4/8 at pp309-314 Part 5/8 at pp315-317

E&Y

E&Y E&Y E&Y E&Y

J&G

JG-CL0160430 et Part 5/8 at al. pp318-340 CANC00121 to CANC00122 Part 5/8 at pp341-343

J&G

E&Y E&Y

2003EY001760 DOJ-032014

Part 5/8 at pp344-345 Part 5/8 at pp346-347

26

27

28

05/08/00 E&Y email dated May 8, 2000, from Thomas Dougherty of E&Y, with the subject line "Cobra Transaction Feedback." 01/06/00 E&Y email dated January 6, 2000, from Robert Coplan of E&Y to VIPER and Quickstrike Teams with subject line "Results of January 5th Meeting Re VIPER Strategies" 07/20/00 DB email dated July 20, 2000, forwarding documents, including DB Memo entitled "Binary Options Strategy: Credit Risk Mgmt PBA Summary" prepared by Chuck Binder MD and SCO PBA at p. 363 of 570

E&Y

DOJ 031731

Part 5/8 at pp348-349

E&Y

2003EY0010462003EY001047

Part 5/8 at pp350-352

DB

DB-DOJ-COBRA- Part 5/8 at 00030714 to DB- pp353-391 DOJ-COBRA00030751

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Govt. Date Description Source Bates Range Ex. # from Source 29 12/05/00 E&Y email dated December 5, 1999, E&Y 2003EY000866 to from Robert "Bob" Coplan of E&Y to 2003EY000867 members of the E&Y's "Quick strike Team" 30 12/11/00 E&Y email, with attachment, dated E&Y DOJ 00395 to December 11, 1999, from Robert DOJ 00398 Haynie of E&Y with subject line "COBRA - Latest Slides." 31 11/05/99 Facsimile (22 pages) dated November Emerson Emerson01448 to 5, 1999 of a J&G opinion marked Emerson01473 "Draft" (22 pages), with handwriting of Jerry Zucker addressed to "Barry" in which he wrote: "Attached is a draft of the opinion letter re: the year end activity resulting in a $45MM tax loss. Please accelerate your understanding by discussing with Ray Knight of EY et al. I'd like to proceed on an accelerated basis for a tax refund." 32 11/12/99 Facsimile (five pages) from Jerry Crosby Marked as Crosby Zucker to Ray Knight of E&Y returning Files Dep. Ex. 2257 an executed copy of a proposed EY COBRA engagement letter, with a cover memo from Jerry Zucker to Ray Knight.

Pages of App. Part 6/8 at pp392-394

Part 6/8 at pp395-399

Part 6/8 at pp400-426

Part 6/8 at pp427-433

33

34

11/12/99 Transcript of Video Depositing of Jerry Zucker taken June 8, 2007, pp.98 101 at p.98, lines 4-16. 11/13/99 E&Y facsimile (seven pages) dated November 13, 1999, from Ray Knight of E&Y to Paul Daugerdas of J&G, forwarding filled-in COBRA Client Information Questionaire for six (6) of the individual participants, including Jerry Zucker and James Boyd. 11/15/99 E&Y Facsimile (nine pages) dated November 15, 1999, from Ray Knight of E&Y to Zucker forwarding a modified COBRA engagement letters for both Zucker and Boyd and memorializing other unstated terms. 11/15/99 E&Y Non-Disclosure Agreement dated November 15, 1999, addressed to Ray Knight with respect to his marketing of the COBRA strategy.

Zucker

Transcript

Part 6/8 at pp434-437 Part 6/8 at pp438-445

J&G

35

Plaintiff

JG-CL0241055, JG-CL0241056, JG-CL0231041, JG-CL015536, JG-CL01555323, JG-CL0148038, and JGCL0148037. Z001282 to Z001290

Part 6/8 at pp446-455

36

E&Y

DOJ039875

Part 7/8 at pp456-457

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Govt. Date Description Source Ex. # 37 11/16/99 Copy of letter dated November 16, Plaintiff 1999, from Donna Guerin of J&G to Mssrs. Zucker and Boyd forwarding enclosed documents for execution and returned, bearing handwritten note from Zucker to Crosby regarding where to send the executed agreements after corrections and executions by Boyd 38 11/19/99 Forms SS-4, 8821 and 2553 signed by J&G Zucker, which purport to have been dated and signed on November 18, 1999; Forms SS-4, 8821 and 2553 signed by Boyd , which purport to have been dated and signed on November 19, 1999; .. 39 11/19/99 Letter dated November 19, 1999, from J&G Charlotte Crosby of The Intertech Group, to Donna Guerin of J&G, returning the documents which had been sent to Mr. Zucker and Mr. Boyd for signature (, without the referenced enclosed,) 40 11/22/99 Letter dated November 22, 1999, from Plaintiff Jerry Zucker to Wachovia authorizing the wire transfer of $3,150,00.00 from his account to the DB account of JZ Buckingham LLC, DB Acct. # 22210153-12 Plaintiff 41 11/23/99 DB Facsimiles (five pages including cover) dated November 23, 1999, at 5:58, from Carrie Yackee of DB to Ray Knight of E&Y at 918437474092 with Indicative Terms and Conditions for GS Owl Creek Investments LLC and TFD Oberlin Investments LLC Plaintiff 42 11/23/99 DB Facsimiles (six of six pages, without cover sheet, dated November 23, 1999, at 18:10, from DB to 918437474092 with Indicative Terms and Conditions for JZ Buckingham Investments LLC and JGB Bohicket Investments LLC JG 43 11/26/99 J&G Facsimile dated November 26, 1999, from Donna Guerin of J&G to Jerry Zucker requesting that he executed the attached documents and that they then be returned by return facsimile and overnight mail as soon as possible.

Bates Range from Source ZUZU00499

Pages of App. Part 7/8 at pp458-459

various

Part 7/8 at pp460-464

JG-CL0147811

Part 7/8 at pp465-466

Z001311 and Z001316

Part 7/8 at pp467-469

Z001328 to Z001332

Part 7/8 at pp470-475

Z001333 to Z001338

Part 7/8 at pp476-482

JG-CL0147876 to Part 7/8 at JG-CL0147891 pp483-499

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Govt. Date Description Source Ex. # 44 11/30/99 Facsimile (26 of 26 pages) dated JG November 30, 1999, from Crosby to Guerin of J&G, with a copy of the executed documents which were faxed to Mr. Zucker and Mr. Boyd for execution on November 26, 1999 45 11/30/99 Authorization signed by James Boyd J&G on behalf of JGB Bohicket to make a wire transfer to DBAB-NY to pay for FX options, with the amount being authorized, $250,000, filled-in on or after the signed authorization was received by J&G on November 30, 1999 with the amount left blank 46 12/07/99 Handwritten memo by Boyd Plaintiff memorializing conversations with Ray Knight of E&Y, David Parse of DBAB, and Shaw Smith 47 12/14/99 Retained copy of letter dated Crosby December 14, 1999 from Donna Files Guerin of J&G to Zucker, enclosing document for execution, with instruction "do not fill in any blanks which appears in those documents at this time (i.e. dates)." EY 48 12/22/99 Authorization signed by Jerry Zucker, as President of JBJZ Investors, Inc, authorizing DB to transfer 5000 shares of Cisco stock from DB Account # 22210156-19 (the account of JBJZ Investors, Inc.) to the DB account of JBJZ Partners. JG 49 12/28/99 Facsimile (six pages) dated December 28, 1999 from Zucker to Guerin with signed copy of J&G engagement letter and signed authorization to wire J&G $1.4 MM 50 12/28/99 Handwritten memo by Boyd to Zucker dated 12/28/99 memorializing his conversation with Ray Knight of E&Y that day, in which he wrote, inter alia, "...the reason we only picked upon the margin gain of $625K (plus the original $2.5M) was because we capped our exposure." 12/29/99 Facsimile (1 page of 1) dated December 29, 1999 of an undated authorization signed by Jerry Zucker on behalf of JBJZ Investors, Inc., for the DB account of JBJZ Investors, Inc. to be charged to pay $1,400,000.00 to Jenkens & Gilchrist. Crosby Files

Bates Range Pages of from Source App. JG-CL0147873 to Part 7/8 at JG-CL0147907 pp500-526

JG-CL0147999

Part 8/8 at pp527-535

ZUZU00498

Part 8/8 at pp536-537

ITCC00006 to ITC000018

Part 8/8 at pp538-551

DOJ041562

Part 8/8 at pp552-553

JG-CL0148264 to JG-CL0148266, JG-CL0237026, JG-CL0148267, and JGCL0148035 Marked as Crosby Ex. 2255

Part 8/8 at pp554-560

Part 8/8 at pp551-562

51

Plaintiff

JZB04417

Part 8/8 at pp563-564

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Govt. Date Description Source Ex. # 52 12/29/99 Facsimile (4 pages) from Boyd to JG Guerin of J&G forwarding signed copy of J&G engagement letter and wire authorization following clarification from Ray Knight of E&Y re stated J&G fee of $140,000.00. 53 03/22/00 IRS filed copy of 1999 Form 1065 for IRS JBJZ Partners, signed by Ray Knight of E&Y as preparer and by Jerry Zucker on 3/22/00 54 03/24/00 IRS filed copy of 1999 Form 1120S for IRS JBJZ Investors, Inc., signed by Ray Knight of E&Y as preparer and by James Boyd as Secretary on 3/24/00 55 04/05/00 Filed copy of 1999 Form 1040 of Mr. IRS and Mrs. Boyd dated 4/5/00, signed by Mr. and Mrs. Boyd and Sheila Pace as preparer 56 04/14/00 Proposed 1999 Form 1045 Application Plaintiff for Tentative Refund, for Mr. and Mrs. Zucker, signed by Emerson as preparer on 4/14/00 57 04/14/00 Filed copy of 1999 Form 1040 of Jerry IRS Zucker dated 4/14/00, signed by Mr. and Mrs. Zucker and Barry Emerson as preparer

Bates Range Pages of from Source App. JG-CL0148031 to Part 8/8 at JG-CL0148034 pp565-570

ADMIN001072 to TO BE FILED ADMIN001087 UNDER SEAL ADMIN001061 to TO BE FILED ADMIN001082 UNDER SEAL ADMIN002229 to TO BE FILED ADMIN002274 UNDER SEAL ZUZU00484 to TO BE FILED ZUZU00487 UNDER SEAL ADMIN001288 to TO BE FILED ADMIN001365 UNDER SEAL

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Respectfully submitted,

/s/ Dennis M. Donohue DENNIS M. DONOHUE CHIEF SENIOR LITIGATION COUNSEL OFFICE OF CIVIL LITIGATION Trial Attorney, Tax Division U.S. Department of Justice P.O. Box 55, Ben Franklin Station Washington, D.C. 20044 Telephone: (202) 307-6492 Facsimile: (202) 307-2504 E-mail: [email protected]

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CERTIFICATE OF SERVICE I hereby certify that on April 21, 2008, I electronically filed the foregoing UNITED STATES'

APPENDIX OF EXHIBITS with the Clerk of the Court using the ECF system which will
send notification of such filing to the following: Joel N. Crouch Texas State Bar No. 05144220 Meadows, Collier, Reed Cousins & Blau, L.L.P. 901 Main Street, Suite 3700 Dallas, Texas 75202

s/ David M. Steiner David M. Steiner Trial Attorney, Tax Division U.S. Department of Justice Post Office Box 55 Ben Franklin Station Washington, D.C. 20044 (202) 307-5892

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