Friday, April 02, 2010

Wondering about the Atlantic Yards Interim Developer? You're out of luck searching the records of tax haven Delaware

Master Closing documents signed on 12/23/09 make reference to not only the Atlantic Yards Development Company, LLC (AYDC), an affiliate of Forest City Ratner, but also Brooklyn Arena, LLC and AYDC Interim Developer, LLC.

(Click on graphics to enlarge)

How might we learn more about the AYDC Interim Developer? Well, the Master Closing documents tell us more than the Delaware Division of Corporations.

Below is a graphic from the documents, which indicates that various outside investors own 41.76% of the Atlantic Yards Development Company (AYDC), which is a subsidiary of the AYDC Interim Developer, while the managing members of AYDC is a Forest City Ratner affiliate:Looking to Delaware

More than 50% of all U.S. publicly-traded companies and 63% of the Fortune 500 have chosen Delaware as their corporate home. The state cites "modern and flexible corporate laws, our highly-respected Court of Chancery, a business-friendly State Government, and the customer service oriented Staff of the Delaware Division of Corporations."

Critics like law professor David Brunori say Delaware registration "is a vehicle for avoiding otherwise legitimate tax liabilities at a time when states need money badly.”

Looking for AYDC

Not only is Delaware a good place for corporations to do business, the Division of Corporations doesn't exactly make it easy to seek records.

It charges fees to those seeking the limited information available:
Corporate Status - On the Web - (This application will reflect the status of an entity but will not generate an official certificate of good standing) You may check corporate/entity status on the web for a fee of $10.00 per entity for status or $20.00 per entity for more detailed information including current franchise tax assessment, current filing history and more. You may charge a Visa, MasterCard or Discover card. Click here for status on the web.
After paying $20, the above screen is what I found.

We do see that the registered agent is The Corporation Trust Company on Orange Street in Wilmington.

Home of the tax haven

The New York Times reported last May, in an article headlined Critics Call Delaware a Tax Haven:
North Orange, a ho-hum thoroughfare in Wilmington, Del., is, on paper, home to more than 6,500 companies. Many of them are empty shells. They make nothing and sometimes employ just a lone clerk. But all are there for the same reason: to help corporations avoid paying taxes in other states.

...That is certainly the view at 1209 North Orange Street, a nondescript low-slung building at the corner of West 13th Street. This address serves as a tax minimizer for dozens of brand-name companies... All of them, and nearly two-thirds of the Fortune 500, have tax-exempt subsidiaries at this address to reduce their state tax bills.

Jerry Daniel, the vice president for government relations at the Corporation Trust Company, which runs 1209 North Orange, does not see what all the fuss is about. After all, the arrangements are legal.

(Emphasis added)

After that the Times quoted Bruniori as suggesting things might not be so kosher.

No comments:

Post a Comment