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directly or through joint ventures in the United States, Canada,
Saudi Arabia, and Mexico. Mr. Leonard has been petitioner’s
president since its inception.
Leonard Baun Holdings, Ltd. (LBH), another Canadian
corporation, originally owned 51 percent of petitioner’s common
stock and 50 percent of its preferred stock. The remaining 49
percent of petitioner’s voting stock and 50 percent of its
preferred stock were owned by an unrelated publicly held company.
At the time petitioner was organized, Mr. Leonard owned 75
percent of the LBH stock and R.W. Baun owned 25 percent.1 In
October 1977, LBH sold to petitioner all of its assets (except for
its participation right in three major pipeline construction
contracts) for Can$6 million and its goodwill for Can$700,000.
In 1978, two additional Canadian corporations were organized,
R.L. Leonard Holdings, Ltd. (RLLH) and R.L. Leonard Consultants
(RLLC). Mr. Leonard owned all the stock in these corporations.
In 1979, LBH was renamed Leonard Pipeline Holdings, Ltd.
(LPH). In 1983, a new Canadian corporation was formed, Leonard
Pipeline Construction, Ltd. (LPC). This corporation was owned by
LPH, which was owned by RLLH.
In 1984, LPH, RLLH, and RLLC consolidated. RLLH was the
surviving corporation, with Mr. Leonard its sole shareholder. RLLH
owned 100 percent of both LPC and petitioner.
1 Mr. Baun's stock in Leonard Baun Holdings, Ltd. was
redeemed in 1979.
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