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shareholders. The remaining two directors were to be appointed
by vote of the other four directors. The JAL and Lufthansa
directors were each entitled to three votes; the Nissho Iwai
director, one vote; the DHL shareholders’ director, five votes;
and the resident directors, one-half vote each.
Around the time the second phase of the transaction was
being completed, DHL’s representatives became concerned about a
tax-related issue denominated the “Alstores problem” because of
the holding in Alstores Realty Corp. v. Commissioner, 46 T.C. 363
(1966). To avoid the problem, DHL’s representatives proposed
several alternative approaches to conveyance of the DHL
trademark. Each alternative involved the present conveyance of
non-U.S. rights and the retention of U.S. rights to the trademark
by DHL for 15 years with a mechanism that permitted DHLI to
obtain ownership of U.S. rights if DHL did not maintain certain
minimum net worth requirements or on the happening of certain
other events. Each alternative contemplated payment of $20
million, even though complete transfer of U.S. rights was not to
be for 15 years. One of the foreign investor’s representatives,
responding in the negative to the proposal, explained that the
transfer of the trademark was to protect the right and interest
of the foreign investors from unexpected situations, such as a
takeover of DHL by its competitors. He further advised that the
foreign investors had no inclination to accept any of the
alternatives proposed unless it not only satisfied the DHL
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