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distinguished from legal ownership. Even if the DHL shareholders
are found to have controlled the entities within the meaning of
section 482, petitioners argue that the transfers of the DHL
trademark did not occur until September 17, 1992, about 1 month
after the August 18, 1992, exercise by the foreign shareholders
of the option enabling them to collectively hold 57.5 percent of
the shares in the new corporate entity that replaced DHLI/MNV.
Conversely, respondent argues that the DHL shareholders
maintained the requisite control after December 7, 1990, because
the foreign investors collectively held only 12.5 percent of the
outstanding stock until their exercise of the 1992 option.
Respondent attempts to minimize the foreign investors’ board
control by contending that they did not have an agreement among
them to vote their shares to elect directors. In addition,
respondent contends that certain limitations placed on the
board’s powers lessen the effect of the foreign investors’ making
up the majority of that body. Finally, respondent argues, in the
alternative, that section 482 would permit reallocation because
the common control factor should be measured at the time the
parties arrange and agree to the transaction in question and not
necessarily at the time the transfer(s) or services occur.
We agree with respondent that the requisite control existed
after the first stage of the transaction (December 7, 1990), even
though the foreign investors collectively had been given the
ability to control the boards. One of the underlying purposes of
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