Reeling from an unfavorable court decision on its tax strategy, banking giant KeyCorp said it would take an after-tax accounting charge of between $1.1 billion and $1.2 billion in the second quarter, cut its dividend in half and raise another $1.5 billion by issuing shares.

The court rejected a leveraged-lease, or sale in/lease out, tax strategy that Key had used in a case involving AWG Leasing Trust (see IRS Prevails in German Tax Shelter Case). The strategy involved Key and PNC Bank setting up a partnership in which they paid $423 million in December 1999 to buy a waste-to-energy facility in Wuppertal, Germany, which they then leased back to the original owner.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access