1988 Tax Law Reversal
In 1988, a new tax law eliminated the tax shelter aspect of the Co-Op Conversion model, making them less desirable and resulting in heavy financial setbacks for Guterman and his Companies. Having already taken financial losses in the "Black Monday" stock market crash of 1987, Guterman placed his Stanhope Hotel (purchased in 1985 for $19,600,000) into Chapter 11 and immediately sold the hotel to Tobishima (a property company from Japan) for over $76,000,000.
Further setbacks were created by a divorce decree that forced Guterman to sell his renowned art collection, considered at the time to be the most valuable such selection of Old Master paintings ever auctioned in New York. While the sale of Guterman's paintings brought "the highest total ever for an Old Master sale in America" and set 11 artist's records for price, to some it was disappointing.
Describing the buying as very selective, John L. Marion, Sotheby's chairman, said: On the one hand, it is the highest total ever for an Old Master sale in America and there were 11 artist's records set. On the other hand, you could observe the fact that there was little or no bidding from dealers. I think this means these were not the kind of pictures they buy for stock.
Read more about this topic: Gerald Guterman
Famous quotes containing the words tax, law and/or reversal:
“In 1845 he built himself a small framed house on the shores of Walden Pond, and lived there two years alone, a life of labor and study. This action was quite native and fit for him. No one who knew him would tax him with affectation. He was more unlike his neighbors in his thought than in his action. As soon as he had exhausted himself that advantages of his solitude, he abandoned it.”
—Ralph Waldo Emerson (1803–1882)
“The law is equal before all of us; but we are not all equal before the law. Virtually there is one law for the rich and another for the poor, one law for the cunning and another for the simple, one law for the forceful and another for the feeble, one law for the ignorant and another for the learned, one law for the brave and another for the timid, and within family limits one law for the parent and no law at all for the child.”
—George Bernard Shaw (1856–1950)
“Perversity depends on reversal and substitution.”
—Mason Cooley (b. 1927)