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Because petitioners argue that DHL and DHLI were operated in
a separate manner, and because of the two-step progression of the
transaction with the foreign investors, the question of control
must be addressed at three different points. First, there is the
period prior to 1990 when there was some common stock ownership
between DHL and DHLI. Then we must consider the interim period
1990 to 1992 when the foreign investors collectively had less
than a majority of the stock holdings and had a majority of the
DHLI board seats. And finally, there is the period after the
foreign investors exercised their “option” collectively to
acquire a shareholding majority.
Until the time of trial, petitioners denied the existence of
any common control within the meaning of section 482. At trial,
petitioners conceded that the requisite control existed before
1990, so that the remaining controversy as to control concerns
the 1990 to 1992 period and the period after the foreign
investors gained collective shareholding control of the foreign
portion of the DHL network.
A. Was There Common Control After December 7, 1990?
Petitioners contend that the foreign investors gained
control of DHLI/MNV as of December 7, 1990, when they became able
to exercise their contractual right to appoint 7 of the 13 board
members of DHLI’s and MNV’s boards. Petitioners acknowledge that
the DHL shareholders retained legal title to a majority of the
outstanding shares, but they argue that actual control should be
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