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Santander Holdings, Government Reach Agreement in STARS Case

NOV. 14, 2018

Santander Holdings USA Inc. et al. v. United States

DATED NOV. 14, 2018
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Santander Holdings USA Inc. et al. v. United States

SANTANDER HOLDINGS USA, INC. & SUBSIDIARIES,
Plaintiff,
v.
UNITED STATES OF AMERICA,
Defendant.

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

Hon. George A. O'Toole, Jr.

November 14, 2018

JOINT MOTION TO CONTINUE STATUS CONFERENCE

Plaintiff Santander Holdings USA, Inc. (formerly Sovereign Bancorp, Inc.) and Defendant United States of America respectfully move to continue the Status Conference scheduled in this case for November 19, 2018 (ECF No. 345). In support of this motion, the parties state as follows:

1. The parties have agreed in principle to a resolution of all claims and defenses in this case. Under that agreement in principle, Santander Holdings USA, Inc. is not entitled to any foreign tax credits or deductions for foreign taxes paid in connection with STARS, is not entitled to any deductions for transaction costs related to STARS, and is liable for accuracy-related penalties under 26 U.S.C. § 6662 for participation in the STARS Trust transaction for the 2003, 2004, and 2005 tax years. Under that agreement in principle, Santander Holdings USA, Inc. is entitled to a refund related to deductions for interest expense for the STARS Loan transaction, the exclusion of the Bx payments from income, previously paid underpayment interest, and related penalty amounts under 26 U.S.C. § 6662, plus applicable overpayment interest, for the 2003, 2004, and 2005 tax years.

2. The parties are currently preparing computations that reflect the parties' resolution. Although the parties have worked diligently to prepare these computations, the parties need some additional time to finalize the figures that reflect the agreed resolution.

3. The parties believe they will be able to agree to final computations in the near future without involving the Court, at which time the parties intend to submit a joint motion for entry of final judgment. The parties expect to submit that motion no later than December 28, 2018, but will work diligently to submit that motion as soon as possible.

4. The parties believe they can agree to the computations and propose a final judgment for the Court's consideration without additional proceedings.

WHEREFORE, the parties respectfully request that the Court continue the November 19, 2018, Status Conference set in this case.

Respectfully submitted this 14th day of November, 2018.

COUNSEL FOR PLAINTIFF

/s/ Rajiv Madan
Rajiv Madan, D.C. Bar #463317
Christopher Bowers, D.C. Bar #468117
Royce Tidwell, D.C. Bar #986763
Christopher Murphy, D.C. Bar #500886
Nathan Wacker, D.C. Bar #1004278
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
1440 New York Ave. NW
Washington, D.C. 20005
Telephone: (202) 371-7000
Facsimile: (202) 393-5760
raj.madan@skadden.com
 chris.bowers@skadden.com
royce.tidwell@skadden.com
christopher.murphy@skadden.com
nathan.wacker@skadden.com

JONATHAN S. MASSEY
Massey & Gail LLP
1325 G Street, N.W., Suite 500
Washington, DC 20005
Telephone: (202) 652-4511
Email: jmassey@masseygail.com

LEONARD A. GAIL
PAUL J. BERKS
Massey & Gail LLP
50 E. Washington St., Suite 400
Chicago, IL 60602
Telephone: (312) 379-0469
Email: lgail@masseygail.com pberks@masseygail.com

COUNSEL FOR THE UNITED STATES

/s/ Harris J. Phillips
DENNIS M. DONOHUE (OH Bar # 0026504)
Chief Senior Litigation Counsel
HARRIS J. PHILLIPS (MA Bar # 675603)
MATTHEW S. JOHNSHOY (NY Bar #5330691)
Trial Attorneys, Tax Division
U.S. Department of Justice
P.O. Box 7238, Ben Franklin Station
Washington, D.C. 20044
Telephone: (202) 307-6492 (DMD)
(202) 616-1906 (HJP)
(202) 616-1908 (MSJ)
Dennis.Donohue@usdoj.gov
Harris.J.Phillips@usdoj.gov
Matthew.S.Johnshoy@usdoj.gov

ANDREW E. LELLING
United States Attorney

RICHARD E. ZUCKERMAN
Principal Deputy Assistant Attorney General

Attorneys for the United States

LOCAL RULE 7.1 CERTIFICATION

Pursuant to Local Rule 7.1(a)(2), the undersigned certifies that counsel for the United States joins in this motion.

/s/ Rajiv Madan
Rajiv Madan, D.C. Bar #463317
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
1440 New York Ave. NW
Washington, D.C. 20005
Telephone: (202) 371-7020
Facsimile: (202) 661-9020
Email: raj.madan@skadden.com

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