- 6 - Federal income tax return for the taxable year ended February 29, 1988. Petitioner and Damca owned 100 percent of the outstanding stock of Multifoods Alimentos, Ltda. (MAL). On February 22, 1979, MAL acquired 85 percent of the outstanding stock of Paty. MAL and Paty were Brazilian "limitadas" organized under the laws of the Federal Republic of Brazil. Paty was a regional pasta manufacturer, which marketed its products in the greater Rio de Janeiro area. Petitioner acquired an indirect interest in Paty, because it believed Paty would be a profitable investment. Through that investment, petitioner sought to expand its presence in Latin America and provide its stock with more appeal to the stockholding community. By February 1982, petitioner and MAL had acquired the remaining 15 percent of the stock outstanding in Paty. On February 29, 1984, the Paty stock which MAL held was distributed to petitioner and Damca upon MAL's liquidation. During its fiscal year 1986, petitioner transferred all but one share of its Paty stock to Damca. Pursuant to a Quota Purchase Agreement,3 entered into on March 30, 1987, petitioner and Damca sold their stock in Paty to Borden, Inc., and its Panamanian subsidiary Borden S.A. Borden, Inc., acquired one share of Paty stock, and Borden S.A., acquired 3A share of stock in a Brazilian limitada is called a "quota".Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
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