Flip, I meant the pre-merger losses of OPCO. For tax purposes, if they are merged, OPCO would file a tax return from 1/1/99 to the date of the merger. Those losses would not offset PZN's income for the same period, but could be carried forward to future post-merger tax years under really complex rules that could significantly delay the tax benefit.
After the merger, everything would be combined (netted). Lord only knows what happens to all the capitalized/deferred intercompany income and expenses related to the special fees. Because the leases would evaporate, I guess they would be netted, too.
One or both of these companies may not be "poolable", so if the merger was treated as a purchase, the intercompany note of 134MM would become goodwill and would be amortized.
To me the merger only makes sense if we're at the point of "nothing left to lose", which we may be. One might say that the LOC is left, but to me it's borrowing money to pay a dividend to qualify as a REIT so the stock price will go up and we can grow again by doing accretive deals. Sound familiar?