DHL Corporation and Subsidiaries - Page 131

                                         - 58 -                                       
          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                  




Page:  Previous  48  49  50  51  52  53  54  55  56  57  58  59  60  61  62  63  64  65  66  67  Next

Last modified: May 25, 2011