Taber Partners, I v. Merit Builders, Inc.

March 3, 1993
United States Court of Appeals
For the First Circuit
No. 92-1921
TABER PARTNERS, I, A NEW YORK GENERAL PARTNERSHIP,
Plaintiff, Appellant,
v.
MERIT BUILDERS, INC., A PUERTO RICO CORP., ET AL.,
Defendants, Appellees.
No. 92-1922
TABER PARTNERS, I, A NEW YORK GENERAL PARTNERSHIP,
Plaintiff, Appellee,
v.
MERIT BUILDERS, INC., A PUERTO RICO CORP.,
Defendant, Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jaime Pieras, Jr., U.S. District Judge]
Before
Selya, Circuit Judge,
Coffin, Senior Circuit Judge, and
Stahl, Circuit Judge.
Harvey B. Nachman with whom Joan Schlump Peters was on brief for
Merit Builders, Inc. and Arch Stokes with whom John R. Hunt, Stokes
and Murphy, Ruben T. Nigaglioni and Ledsma, Palou & Miranda were on
brief for Taber Partners I.
Jay A. Garcia-Gregory with whom Rafael R. Vizcarrondo, Humberto
Guzman-Rodriguez and Fiddler, Gonzalez & Rodriguez were on brief for
appellees.
March 3, 1993
STAHL, Circuit Judge. This appeal requires us to
decide whether, for purposes of diversity jurisdiction, a
partnership's business activities should be considered in
determining the principal place of business of each of its
corporate partners. We hold that, in the absence of evidence
that the partnership and its corporate partners failed to
maintain their separate identities, the partnership's
activities ordinarily should not be considered for this
purpose.
I.
PROCEDURAL POSTURE
Plaintiff Taber Partners I ("Taber"), a New York
general partnership whose sole partners are two New York
corporations, Lerfer San Juan Corp. ("Lerfer"), and Calumet
Corp. ("Calumet"), owns and operates the Ambassador Plaza
Hotel & Casino ("Hotel") in San Juan, Puerto Rico.
Defendants Merit Builders, Inc., and Merit Builders, S.E.
(hereinafter referred to collectively as "Merit") are Puerto
Rico-based construction companies. Beginning in March 1988,
Taber and Merit entered into a series of consulting and
construction contracts involving the renovation and expansion
of the Hotel. Disputes arose during the course of the
project, and in February 1991, Taber commenced a diversity
action against Merit in the United States District Court for
the District of Puerto Rico asserting, inter alia, breach of
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contract, fraud, and negligence. Merit responded with
several counterclaims against Taber and filed third-party
complaints against appellees Victor Torres & Associates
("VTA"), the inspecting architect, and Desarrollos
Metropolitanos, Inc. ("Desarrollos"), one of the project
subcontractors. Like Merit, both VTA and Desarrollos are
citizens of Puerto Rico.
On the eve of trial, VTA and Desarrollos moved to
dismiss, asserting that -- because Taber was also a citizen
of Puerto Rico -- diversity of citizenship was lacking. As
the citizenship of Taber depends upon the citizenship of its
partners, Lerfer and Calumet, the district court first had to
determine Lerfer's and Calumet's citizenship. See Carden v.
Arkoma Assocs., 494 U.S. 185, 195-96 (1990) (reaffirming the
"oft-repeated rule that diversity jurisdiction in a suit by
or against [a partnership] depends on the citizenship of `all
the [partners]' . . .") (quoting Chapman v. Barney, 129 U.S.
677, 682 (1889)). As Lerfer and Calumet are both
incorporated in New York, the sole issue before the district
court was the principal place of business of both
corporations. See 28 U.S.C. 1332(c)(1) ("For the purposes
of [diversity,] . . . a corporation shall be deemed to be a
citizen of any [s]tate by which it has been incorporated and
of the [s]tate where it has its principal place of business")
(emphasis supplied). The district court ultimately
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agreed with VTA's and Desarrollos' argument that the
principal place of business of both Lerfer and Calumet was
Puerto Rico. Thus, on July, 8, 1992, the district court
granted their motion and dismissed the case for lack of
subject matter jurisdiction. See Taber Partners I v.
Insurance Co. of North America, Inc., 798 F. Supp. 904, 912
(D.P.R. 1992).
In this appeal, Taber and Merit, adversaries below,
mount a joint challenge to the district court's dismissal of
their case. In so doing, they argue that, in light of the
undisputed evidence that Lerfer's and Calumet's corporate
activities occurred almost exclusively in New York, the
district court's selection of Puerto Rico as the principal
place of business of both corporations is clearly erroneous.
Before addressing appellants' argument, we sketch the
relevant facts.
II.
FACTUAL BACKGROUND
In December 1986, Mr. F. Eugene Romano and Ms.
Linda E. Romano, citizens of New York, incorporated Lerfer
and Calumet in New York. At all relevant times,1 Eugene
1. For purposes of diversity jurisdiction, citizenship is
determined as of the date of the initiation of the lawsuit.
See, e.g., Freeport-McMoRan, Inc. v. K N Energy, Inc., 111 S.
Ct. 858, 859 (1991); Media Duplication Servs., Ltd. v. HDG
Software, Inc., 928 F.2d 1228, 1236 (1st Cir. 1991). Thus,
we recite relevant facts as they existed on February 15,
1991, the date Taber filed its complaint.
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Romano owned all the outstanding shares of Lerfer, and Linda
Romano owned all the outstanding shares of Calumet. Linda
Romano and Mrs. Jeanne Romano served as the officers of
Lerfer, while Eugene Romano and Jeanne Romano served as the
officers of Calumet. The same three individuals also served
as the directors of both corporations.
Lerfer and Calumet are "Subchapter S" corporations,
a status entitling them to favorable tax treatment under both
federal law, see generally 26 U.S.C. 1361 et seq., and
state law. See generally New York Tax Law 660(a) (McKinney
1987). See also Taber Partners I, 798 F. Supp. at 907-09(explaining the legal and practical underpinnings of an "S
Corporation"). The Certificates of Incorporation of both
companies contain a broad declaration of corporate purpose
"to engage in any lawful acts or activities for which
corporations may be organized under the Business Corporation
Law of the State of New York . . . ."
The headquarters (and sole office) of both
corporations is located at 501 Main Street, Utica, New York.
All corporate books and records are maintained at the
headquarters, and all accounting, auditing, and legal work is
handled for both corporations in the state of New York by New
York accountants and attorneys. Both corporations maintain
their bank accounts in New York, and Lerfer also maintains a
working capital account with an investment firm in New York.
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Each files federal income tax returns from New York and state
income tax returns in New York. Neither files income tax
returns in Puerto Rico.
On December 29, 1986, shortly after their
incorporation, Lerfer and Calumet entered into a partnership
agreement ("the Agreement") that formed Taber. The Agreement
lists New York, or "such other place or places as the
[p]artners may determine[,]" as Taber's principal place of
business.2 Under the Agreement, Lerfer obtained a 99%
ownership interest in Taber, and Calumet obtained a 1%
ownership interest. Lerfer and Calumet agreed to share in
Taber's net profits and losses under a formula which mirrored
their respective ownership interests.
Article IV of the Agreement states: "The primary
and specific purpose of [Taber] is to acquire, own, operate
and manage [the Hotel in Puerto Rico]." Pursuant to section
7.01 of the Agreement, Lerfer and Calumet delegated the day-
to-day management of Taber to Eugene Romano, as executive
director, and Linda Romano, as assistant director. All
responsibilities not enumerated in section 7.01 were
delegated to the partnership generally. The Agreement
2. While the Agreement was negotiated, drafted, and recorded
in New York, it was "protocolized" in Puerto Rico for the
purpose of recording the deed to the Hotel at the Registry of
Property in San Juan. The protocol procedure was necessary
to establish Taber's authority to own property under Puerto
Rico law. See P.R. Laws Ann. tit. 31, 4313 (1991).
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specifically granted Taber the authority, inter alia, to
borrow money, enter into contracts, bring and defend legal
actions, and "[d]o any and all other acts and things
necessary or proper in furtherance of the [p]artnership
business."
Since their incorporation in 1986, Lerfer and
Calumet have both described themselves on their federal and
state tax returns as "holding compan[ies]." Eugene and Linda
Romano testified in their depositions that each corporation's
sole function is to hold or administer its respective
interest in Taber. To this end, Lerfer and Calumet employ a
"control-group" of twelve individuals to maintain their
corporate records and financial accounts. All such
maintenance occurs exclusively in New York. An example of
the type of New York-centered activity in which Lerfer and
Calumet engage is their management of loan transactions
designed to secure their ownership interests in Taber. For
instance, Eugene Romano has made substantial loans (totalling
approximately $8,000,000) to Lerfer, which, in turn, reloaned
these funds to Taber. Each of these loans consisted of funds
that originated in New York and were evidenced by promissory
notes prepared, executed, and delivered in New York.
The record reveals that all policy decisions for
Lerfer and Calumet are made in New York. For example, the
decision to invest in Taber was made in New York. The
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election of corporate officers and the appointment of
accountants occur at the annual Board of Directors meetings
held in New York. Indeed, the record contains almost no
evidence of corporate activity on the part of either Lerfer
or Calumet taking place outside of New York.3
Despite these uncontroverted facts, the district
court concluded that the principal place of business of both
Lerfer and Calumet was Puerto Rico. In so doing, the court
rejected appellants' characterization of Lerfer and Calumet
as "passive" holding companies and found that their raison
d'etre included the operation of the Hotel:
Only a[n] unrealistically narrow view of
the orientation of the corporations and
their partnership could yield such a
conclusion. The corporations were formed
to act as owners of the [Hotel]. They
devote almost all of their corporate
activity to administer their assets in
the partnership. They actively
authorized the formation of Taber and the
obtaining of a bond to assist in the
financing of the projects. They have
loaned substantial amounts of money to
Taber. And the directors of the
partnership, Mr. and Ms. Romano, are the
directors of the corporations. Under
these circumstances, the Court cannot
accept the characterization of the
corporations' interests in Taber as
passive. The Court therefore considers
of greater significance the location of
the corporations' primary activity. This
activity is the renovation and operation
3. The record reveals that Lerfer's and Calumet's Boards of
Directors held two "special meetings" in San Juan, Puerto
Rico, in connection with the initial purchase and subsequent
refinancing of the Hotel.
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of the [Hotel], which is located in
Puerto Rico.
Taber Partners I, 798 F. Supp. at 912. We do not concur in
the district court's analysis.
III.
DISCUSSION
A district court's determination of citizenship for
purposes of diversity jurisdiction is a mixed question of law
and fact. As such, we will not set aside the district
court's decision unless it is "clearly erroneous." Lundquist
v. Precision Valley Aviation, Inc., 946 F.2d 8, 11 (1st Cir.
1991); Media Duplication, 928 F.2d at 1237. In addition, we
review the facts of this case mindful that the party invoking
the jurisdiction of a federal court carries the burden of
proving its existence. See, e.g., Lundquist, 946 F.2d at 10.
In this circuit, we utilize "three distinct, but
not necessarily inconsistent tests" for determining a
corporation's principal place of business: (1) the "nerve
center" test, which searches for the location from which the
corporation's activities are controlled and directed; (2) the
"center of corporate activity" test, which searches for the
location of the corporation's day-to-day management; and (3)
the "locus of the operations of the corporation" test, which
searches for the location of the corporation's actual
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physical operations. Topp v. CompAir Inc., 814 F.2d 830, 834
(1st Cir. 1987).
While we have not had occasion to apply these tests
to a general partnership whose partners are corporations, we
frequently have applied them to corporations involved in
parent-subsidiary relationships. See, e.g., U.S.I.
Properties Corp. v. M.D. Constr. Co., Inc., 860 F.2d 1, 7
(1st Cir. 1988), cert. denied, 490 U.S. 1065 (1989);
Rodriguez v. SK & F Co., 833 F.2d 8, 9 (1st Cir. 1987); Topp,
814 F.2d at 833-39; Lugo-Vina v. Pueblo Int'l, Inc., 574 F.2d
41, 43-44 (1st Cir. 1978); de Walker v. Pueblo Int'l, Inc.,
569 F.2d 1169, 1170-73 (1st Cir. 1978). In this context, we
have repeatedly held that, where there is no evidence that
the integrity of the corporate form has been violated, the
separate corporate identities of a parent and subsidiary
should be honored when determining either one's principal
place of business. See U.S.I. Properties, 860 F.2d at 7(recognizing separate corporate identity of subsidiary
despite evidence that subsidiary was wholly-owned by
"grandparent" corporation, shared all its officers and
directors with grandparent, was grossly undercapitalized, and
did not prepare its own budget, construction requirements, or
policies and procedures); Rodriguez, 833 F.2d at 9(recognizing separate corporate identity of subsidiary where
evidence showed that it operated independently from its
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parent); Topp, 814 F.2d at 833 (recognizing separate
corporate identity of subsidiary holding company despite
evidence that it could not act without the express permission
of its parent, and that its sole function was to serve as
financial conduit for parent); Lugo-Vina, 574 F.2d at 43(recognizing separate corporate identity of parent where
evidence showed it operated independently of wholly-owned
subsidiary); de Walker, 569 F.2d at 1173 (recognizing
separate corporate identity of parent despite evidence that
parent consolidated its profits and losses with that of its
wholly-owned subsidiary in presenting parent's financial
reports to shareholders, that subsidiary was considered a
"division" of parent, and that subsidiary accounted for 60%
of parent's and subsidiary's combined operations). Accord
Danjaq, S.A. v. Pathe Communications Corp., 979 F.2d 772,
774-75 (9th Cir. 1992) (recognizing separate corporate
identity of parent despite evidence that subsidiary
"perform[ed] the lion's share" of the film production for the
parent) (citing Lugo-Vina, 574 F.2d at 43-44); Pyramid
Securities Ltd. v. IB Resolution, Inc., 924 F.2d 1114, 1120
(D.C. Cir.) (recognizing separate corporate identity of
parent despite evidence that parent was "alter-ego" of its
subsidiary and was being sued for acts of its subsidiary)
(citing U.S.I. Properties Corp., 860 F.2d at 7), cert.
denied, 112 S. Ct. 85 (1991); Schwartz v. Electronic Data
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Sys., Inc., 913 F.2d 279, 283 (6th Cir. 1990) (recognizing
separate corporate identity of subsidiary where evidence
showed "formal separation [was] maintained") (citing U.S.I.
Properties Corp., 860 F.2d at 7; Topp, 814 F.2d at 835).
Contra Freeman v. Northwest Acceptance Corp., 754 F.2d 553,
557 (5th Cir. 1985) (imputing citizenship of a subsidiary to
its parent and alleged "alter-ego") (citing Toms v. Country
Quality Meats, Inc., 610 F.2d 313, 315-16 (5th Cir. 1980));
Bonar, Inc. v. Schottland, 631 F. Supp. 990, 997-98 (E.D. Pa.
1986) (imputing citizenship of parent to subsidiary where
evidence showed that the business of both was "identical" and
court determined that their formal separation was "merely a
corporate fiction").
For instance, in Topp, we held that the district
court erred in applying the "nerve center" test in a manner
which "ignore[d] the separate corporate identity of the
corporation whose citizenship [was] being sought." Topp, 814
F.2d at 835. In that case, the district court determined
that the principal place of business of the subsidiary was
England, the location of the parent. Id. at 832. The
subsidiary in Topp was a holding company with no
manufacturing, purchasing, or sales facilities. Id. at 834
n.3. Its principal function was to act as a financial
conduit for its parent, providing administrative and
financial services to various other subsidiaries across the
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United States. Id. at 834. The district court found that,
although the subsidiary maintained an office and conducted
its business activities in New Hampshire, it was controlled
by the parent who made all of the major policy decisions,
including the hiring and firing of the employees of the
subsidiary. As a result, the district court reasoned that
England was the subsidiary's "nerve center." Id. at 832.
We reversed the district court and held that it
erroneously merged the activities of the subsidiary and the
parent in determining the subsidiary's "nerve center." Id.
at 834. We made clear that, in determining a corporation's
principal place of business, the activities of the company
whose citizenship is at issue are those that are relevant.
Id. Moreover, we held that as long as the corporate
formalities are preserved by the parent and subsidiary, they
are entitled to recognition:
[D]efendants presented uncontradicted
evidence that [the subsidiary]
maintained, in New Hampshire, its own
general ledger, corporate minutes book
and register of unissued stock, its own
bank accounts, and its own executive
offices. [The subsidiary] filed its own
federal and state income and unemployment
taxes, social security contributions and
excise taxes. This evidence indicates
that the separate corporate identity of
[the subsidiary] is entitled to be
recognized.
Id. at 837. We therefore concluded that, while "the shots"
may have been called by the parent in England, the principal
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place of business of the subsidiary was New Hampshire, the
"operational center of the corporation in question." Id. at
835 n.4.
Likewise, in de Walker, we held that a parent's
principal place of business was Puerto Rico, the situs of its
"day-to-day management and operations," rather than New York,
the place where its wholly-owned subsidiary conducted
business. de Walker, 569 F.2d at 1172. Despite compelling
evidence that the parent and subsidiary in de Walker were
closely intertwined, see id. at 1171, we were not persuaded
to ignore their separate corporate identities. Id. at 1172.
The critical factual question in de Walker, as in
Topp, was not the degree of control the parent exercised over
the subsidiary, but whether the two businesses preserved
their separate corporate identities. We reasoned that:
While the documents . . . indicate that
[the parent] was ultimately the sole
beneficiary and director of [the
subsidiary's] corporate activities, there
is nothing in the record to undermine
[the parent's] claim that the two
corporations were separately
incorporated, had separate boards of
directors, kept separate accounting and
tax records, and had separate facilities
and operational personnel. And, leaving
aside the activities of [the subsidiary
in New York], there is next to nothing in
the record to establish that [the
parent], in its corporate capacity,
conducted any business outside Puerto
Rico.
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de Walker, 569 F.2d at 1171 (emphasis supplied). We further
reasoned that the close interrelationship of the corporations
was incidental to the parent's ownership of 100% of the
subsidiary's stock and did "not justify ignoring the
otherwise separate character of the two corporations."4 Id.
at 1173.
Thus, pertinent circuit authority, particularly our
opinions in Topp and de Walker, stand for the following two
unremarkable propositions: (1) that in determining a
corporation's principal place of business, a district court's
inquiry must focus solely on the business activities of the
corporation whose principal place of business is at issue;
and (2) that an exception to this general rule applies where
there is evidence that the separate corporate identities of a
parent and subsidiary have been ignored. We can discern no
reason why these propositions should not apply with equal
force where the entities at issue are corporate partners.5
4. An exception to this general rule exists in cases where
there is evidence that the parent and subsidiary have
violated the integrity of the corporate formalities which
they selected. E.g., de Walker, 569 F.2d at 1173.
5. The appellees attempt to justify the district court's
treatment of Taber, Lerfer, and Calumet as one entity for
diversity purposes by relying almost exclusively upon New
York partnership law, which they contend regards the partners
and a partnership as a single entity. Whether or not
appellees are correct in their characterization of New York
partnership law, a proposition on which we express no
opinion, such law is not controlling in light of federal law
which distinguishes between a partnership and its partners
for purposes of diversity jurisdiction. See, e.g., Carden,
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Here, the uncontroverted facts reveal that the sole
corporate "activities" of Lerfer and Calumet consist of
holding or administering their assets in Taber, and that all
such administering occurs exclusively in New York. Moreover,
there is no evidence that Lerfer and Calumet engage in the
operation and/or management of the Hotel. Indeed, it is
uncontroverted that Taber was expressly created by Lerfer and
Calumet, as stated in the Agreement, "to acquire, own,
operate and manage [the Hotel in Puerto Rico]." See also 798
F. Supp. at 905, 906 (characterizing as undisputed the fact
that "Taber's business is the operation and management of the
[Hotel]"). It is also apparent from the Agreement that
Lerfer and Calumet delegated the day-to-day management of
Taber to Taber's officers, Eugene and Linda Romano.
Appellees have introduced no evidence to suggest that either
Lerfer or Calumet ever usurped that role.6
494 U.S. at 195-96. We therefore find appellees' argument
unpersuasive.
6. We are aware that the district court found that Lerfer's
and Calumet's "primary activity . . . is the renovation and
operation of the [Hotel], which is located in Puerto Rico."
See Taber Partners I, 798 F. Supp. at 912. However, we have
not found any evidence to support such a finding. Indeed,
the district court itself found that "[Lerfer and Calumet]
devote almost all of their corporate activity to administer
their assets in the partnership," id., activity which occurs
almost exclusively in New York. It further found that
"Taber's business is the operation and management of the
[Hotel]." Id. at 906. Given that the district court made no
attempt to reconcile these findings, we are not inclined to
accord them any deference.
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In sum, the record reveals that Lerfer and Calumet
serve as holding companies which manage their assets in
Taber, a separate, and legally distinct, partnership entity,
and that all their "activities" as holding companies occur
exclusively in New York. We need go no further. Under
either the "nerve center" test or the "center of corporate
activity" test,7 the principal place of business of both
Lerfer and Calumet is New York.8 Cf. Vareka Invs., N.V. v.
American Inv. Properties, Inc., 724 F.2d 907, 910 (11th Cir.)
(holding that Ecuador corporation which served as "passive
investment vehicle" for Florida real estate venture had
principal place of business in Ecuador where it maintained
its corporate books and records, made all corporate
decisions, held all corporate meetings, hired its employees,
and obtained loans for the initial purchase of the venture),
cert. denied, 469 U.S. 826 (1984).9 Both Lerfer and Calumet
7. Because Lerfer and Calumet have no physical operations
(i.e., factories, warehouses, sales offices, etc.) the "locus
of the operations of the corporation" test would not be
helpful. See Topp, 814 F.2d at 834 n.3 (rejecting utility of
a "locus of physical operations of the corporation" test for
a holding company).
8. Because we find that New York is the principal place of
business of both Lerfer and Calumet under either the "nerve
center" or "center of corporate activity" test, we need not
determine which of the two tests is most appropriate under
these facts.
9. In so holding, we are not unaware of a line of cases in
which district courts, in determining the principal place of
business of a holding company, have looked to the business of
the entity whose assets are being held rather than to the
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business of the holding company. See Bonar, 631 F. Supp. at
996 ("[the holding company] was created to hold and operate
[parent's] interest in [Pennsylvania company], and it has no
business other than this venture. Therefore, [the holding
company's] principal place of business is clearly
Pennsylvania, not the state in which its executive and
administrative offices may be located . . . ."); Hanna Mining
Co. v. Minnesota Power & Light Co., 573 F. Supp. 1395, 1400
(D. Minn. 1983) ("[The holding company] was created to hold
and operate [parent's] interest in [Minnesota venture], and
it has no business other than this venture. Therefore, [the
holding company's] principal place of business is clearly in
Minnesota, not in the state in which its executive and
administrative offices may be located . . . ."), aff'd, 739
F.2d 1368 (8th Cir. 1984); Hereth v. Jones, 544 F. Supp. 111,
112 (E.D. Va. 1982) ("[The holding company's] sole raison
d'etre is to be the corporate general partner in [a] Virginia
nursing home venture. Thus[,] such activity as exists in
Virginia is greater than the non-activity in any other
[s]tate.").
While we were unable to discern from the facts of Hanna
Mining exactly what level of activity took place in the state
where the holding company's offices were located, the facts
of both Bonar and Hereth reveal that the holding companies at
issue in each case performed no corporate activity of any
kind in the states where their offices were located. Indeed,
in Bonar, the evidence revealed that the "office" was merely
a mailing address, and that the company had no employees,
executives, officers, or directors in the state where the
"office" was located. Bonar, 631 F. Supp. at 994-95. As a
result, the court was persuaded to look to Minnesota, where
the holding company's attorney resided and worked, where its
officers and directors resided, and where the negotiations
over the initial stock purchase occurred. Id. at 995.
Likewise, in Hereth, the court found that the holding company
had "absolutely no function or activity" in the state of
incorporation, and had "no employees anywhere." Hereth, 544
F. Supp. at 112. As a result, the court looked to the
activities of the business venture that was owned by the
partnership in which the holding company was a general
partner. Id.The instant case, however, presents an entirely
different fact pattern. As detailed above, Lerfer and
Calumet operate out of New York. They have an office,
employees, bank accounts, a working capital account,
corporate books and records, and Board of Directors meetings
in New York. The corporate officers and directors all reside
in New York, and almost all of the corporations' decisions
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are therefore citizens of New York. And because a
partnership is a citizen of those states in which its
partners are citizens, see supra p. 3, it follows that Taber
is also a citizen of New York, and that the district court's
contrary determination was clearly erroneous.
IV. CONCLUSION
As Taber is a citizen of New York, the amount in
controversy is ample, and none of the entities on the other
side of the lawsuit shares Taber's citizenship, subject
matter jurisdiction is present. We therefore reverse and
remand the case for further proceedings consistent with this
opinion.
Reversed and remanded.
are made in New York. As such, Lerfer and Calumet, unlike
the holding companies at issue in Bonar and Hereth, are
holding companies with corporate operations distinct from
those of the company whose assets they hold. As a result, we
find the reasoning in the above line of cases inapposite.
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