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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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