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for approximately $8,700. Except for the price and the parties,
this document was virtually identical to the agreement dated
May 1, 1986, where TM purportedly sold the rights to the
intangibles to Gatetown.
In some instances, the corporate parties to an alleged
agreement were not in existence on the date of the document. An
example is a document dated February 26, 1986, whereby Lince
loaned money to Gatetown, and Gatetown agreed to pay Lince
95 percent of Gatetown’s income. Lince was not incorporated
until May 16, 1986. Petitioners attempt to justify backdating as
a common practice to memorialize agreements. In these cases,
however, the pattern of backdating was so pervasive as to cast
doubt on the reliability of petitioners' representations as to
what was agreed, when, and by whom. The only intent that is
clear is the intent to conform to C&L's proposals to minimize or
avoid tax liability.
When the intangibles became legally protected by the
registration of the trademarks in 1987 and 1988, there was no
consideration paid to MTNV/MSI. C&L and the Spanish investors
were undecided as to whether Manver or Gatetown should hold the
trademarks in their name. The decision to hold the trademarks in
Manver’s name was not made until December 1986, when C&L received
a favorable tax ruling from the Netherlands Antilles. The
licensing agreements between Manver and MSI and Manver and MDT
were dated May and July 1986, several months before the final
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