DHL Corporation and Subsidiaries - Page 11

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          T.C. 502, 512 (1967))”.  Estate of Hall v. Commissioner, 92 T.C.            
          312, 338 (1989).                                                            
               On brief, petitioners argue that the $20 million price                 
          agreed to by the parties to the transaction was at arm’s length             
          because of the differing and adverse interests as between the               
          controlling shareholders and the foreign investors.  Petitioners            
          also contend that the 1989 negotiations established “a $50                  
          million ceiling value” for the DHL trademark worldwide.  The main           
          thrust of petitioners’ argument on value is that tangible and               
          intangible components (other than the trademark) of the DHL air             
          express network and the ability to efficiently deliver are worth            
          more to customers than the DHL name, and, therefore, the network            
          was “far more valuable” than the trademark.                                 
               Respondent, on the other hand, contends that an analysis of            
          the values used by the parties to the transaction will reflect              
          that the intangibles, primarily the trademark, were valued by the           
          foreign investors at almost $300 million12 and that amount                  
          comports with respondent’s experts’ proffered values.  As an                
          alternative, respondent argues that value resides in DHL’s                  
          retention of the right to use the DHL trademark in the United               




               12  Respondent’s determination alternatively valued the                
          trademark in 1990 and 1992.  The 1992 valuation produced the                
          higher amount approximating $600 million and the 1990 valuation             
          was closer to $500 million.  Respondent’s litigating position,              
          which is based on the 1990 date, approximates a $300 million                
          value for the trademark.                                                    



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