Opinion ID: 1912708
Heading Depth: 2
Heading Rank: 2

Heading: The Two Transactions

Text: In 2003, Smith Property Holdings decided to sell the Alcazar building for tax reasons. It received an offer to purchase from the Fairfield Companies, but that offer was not countersigned by Smith Property Holdings. Instead, the parties engaged in two separate transactions within a short period of time. In the first transaction, Smith Property Holdings created the Trust, after which the Custodian was created and named trustee, with Smith Property Holdings as beneficiary. Smith Property Holdings then transferred the Alcazar to the Trust by deeding it to the Custodian to be held in trust for the beneficiary, 1841 Columbia Road LLC. The Custodian then assigned the beneficial interests of the trust to 1841 Columbia Road LLC as beneficiary. The result was that the latter now owned the trust, and hence the Alcazar. But 1841 Columbia Road LLC itself was still owned by Smith Property Holdings, L.P., which had owned the building before the transaction began. In the second transaction, Smith Property Holdings, L.P., sold the membership interests of 1841 Columbia Road LLC to two entities, 1841 Columbia Road Investors, LLC and FF Columbia Road LLC. The assets conveyed included the Trust, which had the Alcazar as its sole asset. Finally, Smith Property Holdings, L.P., relinquished its interests in the Custodian to 1841 Columbia Road LLC, now owned by the two independent purchasers (1841 Columbia Road Investors, LLC and FF Columbia Road LLC). At the end of these transactions, the two independent purchasers thus controlled both the Custodian and the beneficiary of the Trust, although the Trust retained all property interests in the Alcazar.