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MABV issued an interest-bearing note in the amount of 5,530,525
Dutch Guilders with 9.5-percent interest due quarterly and the
principal due in 10 years on presentation of the promissory note.
MABV also issued a non-interest-bearing note for $8.4 million
(U.S.) that was payable in 10 years upon presentation of the
note.
MABV immediately transferred the assets it received from
MANV to MDT for a total consideration of $14 million. Of this
amount, $3.5 million was paid with MDT stock and $10.5 million
was paid with an interest-bearing note. The interest-bearing
note had a rate of 10 percent. The interest was due quarterly,
and the principal was due in 5 years.
After the section 351 transfers, MTNV held all the stock of
MTBV, which held all the stock of MSI. MANV held all the stock
of MABV, which held all the stock of MDT. The C&L September 30,
1988, letter to the Inspector of Taxes stated that Manver held
all the shares of both MANV and MTNV.
MSI and MDT signed licensing contracts with Manver that were
substantially the same as the Manver-MTNV/MANV contracts. The
MSI and MDT documents were dated August 1, 1987, and December 1,
1987, respectively. MSI and MDT signed new management contracts
with Eurotor dated August 1, 1987, and December 1, 1987,
respectively.
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