www.dailybusinessreview.com/news.html?news_id=42528 -
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Published on: 3/26/2007
Last Visited: 7/16/2007
Dealmakers: Attorneys Martin A. Schwartz and Michelle A. Kahn
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Attorneys Martin A. Schwartz and Michelle A. Kahn utilized an international treaty to close a client's $230 million sale of the Wyndham Aruba Resort without paying hefty taxes.
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Schwartz, a partner at Miami-based Bilzin Sumberg Baena Price & Axelrod, and Kahn, represented the seller, Aruba Hotel Enterprises, and negotiated between the two buyers and eight other parties on the seller's side.Attorneys from 11 law firms were involved in the sale.
Schwartz spent more than a year working on the deal, beginning in April 2005.
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The idea of invoking the treaty developed after Schwartz talked with hotel accountants.
"It actually changed the deal in midstream," Schwartz said.
A treaty between the Netherlands Antilles and former member Aruba exempted taxes on transfers between the islands.Aruba seceded in 1986.
"The reason it worked was that Aruba and Curacao were originally part of the Netherlands Antilles," Schwartz said.Curacao also was the home of one of the sellers' affiliates.
Through a chain of entities, the funds were transferred to Aruba Hotel Enterprises' Curacao-based parent, which moved the funds to Miami without a tax bill.Between the hotel and time-share transactions, about 10 commonly owned entities were involved in the deal, Schwartz said.
The transaction also involved two simultaneous closings May 3 - the financing in New York and the title transfer in Aruba.
Schwartz and Kahn also negotiated a hotel management transfer from Wyndham to Westin within three months of the sale, and the 481-room casino property now operates as the Westin Aruba Resort.
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Schwartz and associate Javier A. Granda represented Mellon United National Bank last year in closing two acquisition loans totaling $88.7 million.
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Schwartz also represented Mellon United in closing a $70 million construction loan in 2005 for 1040 Biscayne Associates for the construction Ten Museum Park in Miami.