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Petitioners' argument is unpersuasive for several reasons. As we
concluded earlier, Manver did not own the rights to the
intangibles so there was no reason for MSI and MDT to pay
royalties to Manver. The heavy burden imposed by the alleged
royalties simply casts further doubt on whether the rates were
reasonable. In fact, because Manver, MSI, and MDT were all
controlled by the same individuals, the alleged financial
hardship was self-imposed and could easily have been remedied by
reducing the royalty rates. The record is replete with
additions, alterations, and revisions to agreements. Petitioners
included in the lump-sum amounts royalty payments of
$5.85 million for a second California castle and a New Jersey
castle, neither of which was built yet. The second California
castle never opened. There is neither credible evidence nor
reason to believe that an unrelated party would have been willing
to pay $5.85 million in advance for royalty payments on
speculation as to possible future need for the intangibles.
Petitioners' position is further weakened by the amendments
to the MSI/MDT and Manver royalty agreements that provided for
payments in excess of the lump-sum amounts if either MDT's or
MSI's gross sales exceeded certain base amounts. The amendments
provided that MSI and MDT were to pay Manver 15 percent of their
gross sales that were in excess of the base amounts. An
agreement to pay additional royalties, in excess of the lump-sum
amounts, is inconsistent with the claim that the original lump-
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