Long Term Capital Holdings, et al. v. United States was a court case argued before the United States District Court for the District of Connecticut that concerned a tax shelter used by Long-Term Capital Management, a failed hedge fund.
The tax shelter had been designed by Babcock & Brown for Long-Term Capital to shelter it's short-term trading gains from 1997.
The case was an appeal of an Internal Revenue Service denial of the plaintiffs' claim of $106,058,228 in capital losses during the 1997 tax year and associated penalties. After a bench trial, Judge Janet Bond Arterton ruled, on August 27, 2004, that the transactions employed by Long-Term Capital Holdings did not have economic substance and so were disregarded for tax purposes.
References
Long-Term Capital Holdings v. United States Wikipedia(Text) CC BY-SA