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by business reality. In such circumstances, it is appropriate
for us to consider the relationship between a religious
organization and its members.
Maitland, petitioner's founder and chief executive officer,
had a longstanding, close relationship with the various Nyingma
organizations. Maitland studied at the Nyingma Institute, served
as its dean, taught classes there, and lived at the school.
Maitland was also a director of Nyingma Centers Corp. In
addition, Petranker, who negotiated the license for DM, had ties
to petitioner. He prepared its articles of incorporation and
acted as the sole incorporator. Petranker also lent startup
capital to petitioner so that its founders did not have to make
capital investments. In 1988, petitioner owed over $70,000 to
Petranker. Moreover, all of petitioner's nine directors were
members of the Nyingma community and subscribed to the teachings
of the Nyingma school of Tibetan Buddhism. Petitioner’s
directors also served as directors of the other Nyingma
organizations, lived in the Nyingma housing, were deans of the
Nyingma Institute, and had taught courses there. In addition,
Maitland recruited employees for petitioner from the classes he
taught at the Institute.
The manner in which petitioner and DM conducted the license
negotiations raises suspicion and leads to a finding that arm's-
length bargaining did not exist. Maitland did not prepare a
business plan and relied on plans and sales projections prepared
by SMP. Petitioner received valuable assets from DM, including
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