Page 458 - WhyAsInY

Why (as in yaverbaum)
before the tax year ends. Moreover, to accomplish that task with as little expense as possible, you have found that working your law firm around the clock is the best way to get it done.9
Thus, it fell to me to head up large teams of real estate lawyers, working at the side of tax and corporate attorneys, to fashion, draft, and negotiate intricate and vast webs of acquisition materials, “wraparound” mortgages,10 limited partnership agreements, leases, purchase options, and management agreements—all aimed at making Integrated, which was acting as a lender, look like an owner, so that it could enrich dentists, doctors, and executives by making them “owners” in an array of proper- ties that they would never see—and to do so at the expense of all of the other taxpayers (for instance, me) who did not exhibit the supposed real estate investment acumen that they had.
I calculate that over a period of three years (when, I might add, my marriage was not in the best of shape), I was involved in many billions of dollars of transactions, and many thousands of billable hours, in connec- tion with properties in at least fifteen states, all of which had to be
9. One of my favorite moments—and I use the word favorite with more than a touch of cyni- cism—came when we and the Kaye Scholer firm were setting up a large transaction between Integrated and Olympia & York. The basic papers could have been generated by the O&Y at- torneys or by my team. Passover was upon us, but, as usual, we were placed under a ridiculous amount of time pressure. O&Y was owned by the Reichmann brothers, who were Orthodox Jews—so Orthodox that they had a rabbi on the payroll just to make sure that everything was “kosher.” The house rabbi decreed that O&Y’s attorneys could not work on the papers during the holiday period but, magically, that Integrated’s lawyers could, so therefore the deal could move forward. With what reasoning? Well, Olympia & York was a partnership that was owned and run by Jews. But, aha (!), Integrated, which was also controlled and managed by Jews, was a public company, not a partnership, and therefore the transaction was not the action of Jews; moreover, Integrated owed a duty to its shareholders, some of whom must be “goyim,” to get the transaction done expeditiously. Needless to say, Integrated was delighted by this Talmudic anal- ysis—and we had to press on through the Pesach nights to draft the papers.
10. A wraparound is a second mortgage that is held by a lender who collects debt service pay- ments made on it and then makes the debt service payments owed to the senior mortgage holder, retaining the—often large—difference between the two amounts. The nominal size of the wraparound is larger than, but includes (“wraps around”), the outstanding principal balance of the senior mortgage. It was used in tax shelter transactions to, in effect, create a higher, and therefore more depreciable, purchase price for the asset in question.
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