The court further held that the partner's allocation of profits and losses was improper; the conduct of Allied and ABN demonstrated that the Bermuda agreement, which provided for a guaranteed return on investment for ABN, was the substance behind the formula provided by the partnership agreement.
As a result, the gains relating to the sale of the PPNs and the loss generated on the sale of the LIBOR notes were allocated entirely to the Allied affiliated group.
In light of Allied and ACM, taxpayers should more critically examine the substance of transactions involving partnerships, to ensure they will be respected.
Allied Solutions was founded 25 years ago by a group including several former Minnesota Life associates, and the companies have marketed each other's products since 1999.
Under the agreement, Minnesota Life's sales and service personnel who work in regional offices will become employees of Allied Solutions, resulting in one field force of approximately 100 associates.
Clients' relationships with their vendors will not change and both the Allied Solutions and Securian brands will be used for marketing.