MoneyGram 2013 Annual Report Download - page 26

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Table of Contents
Other Matters —
The Company is involved in various other government inquiries and other matters that arise from time to time. Management
does not believe that after final disposition any of these other matters is likely to have a material adverse impact on the Company’
s financial
condition, results of operations and cash flows.
Actions Commenced by the Company:
CDO Litigation —
In March 2012, the Company initiated an arbitration proceeding before the Financial Industry Regulatory Authority against
Goldman Sachs & Co., or Goldman Sachs. The arbitration relates to MoneyGram’
s purchase of Residential Mortgage Backed Securities and
Collateral Debt Obligations that Goldman Sachs sold to MoneyGram during the 2005 through 2007 time frame. The Company alleges, among
other things, that Goldman Sachs made material misrepresentations and omissions in connection with the sale of these products, ultimately
causing significant losses to the Company for which the Company is currently seeking damages. Goldman Sachs owns, together with certain of
its affiliates, approximately 19 percent of the shares of the Company’
s common stock on a diluted basis, assuming conversion of the D Stock
currently owned by Goldman Sachs and its affiliates.
Tax Litigation — On May 14, 2012 and December 17, 2012, the Company filed petitions in the U.S. Tax Court challenging the 2005-
2007 and
2009 Notices of Deficiency, respectively, pursuant to which the IRS determined that the Company owes additional corporate income taxes
because certain deductions relating to securities losses were capital in nature, rather than ordinary losses. The Company asserts that it properly
deducted its securities losses and that, consequently, no additional corporate income taxes are owed. The IRS filed its responses to the
Company’s petitions in July 2012 and February 2013 reasserting its original position relating to the years 2005-
2007 and 2009. The cases have
been consolidated before the U.S. Tax Court. In December 2013, the IRS filed a motion with the court for partial summary judgment in the case,
and in February 2014 the Company filed its response to that motion which included the Company's request for partial summary judgment.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
24