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Corrections Corporation of America Message Board

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  • newMK newMK May 28, 1999 10:07 AM Flag


    OK, let's assume Transcor business was worth
    $100MM at time of merger, and let's further assume that
    OPCO paid nothing for it.

    Those are
    assumptions, now the facts. All the real estate was revalued
    and the lease payments were jacked up significiantly
    to the point where OPCO wasn't making enough money,
    even with whatever wonderful profits it was getting
    from Transcor. Please explain to me how OPCO (or its
    shareholders) are benefitting.

    Bear in mind that the
    affiliated lease structure is so one-sided in favor of PZN
    that some great analysts (and auditors) are (were)
    concerned about tax implications. Bear in mind also that a
    class action lawsuit "forced" OPCO to pay more moeny to
    PZN (which we now have to refund via fee
    adjustments). The lawsuit wasn't insignificant. In fact, the
    lawyers worked so hard on it (and got so much value for
    PZN shareholders) that they were awarded $4.5MM in
    fees for the sweat of their brows.

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