DHL Corporation and Subsidiaries - Page 156

                                         - 83 -                                       
          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           




Page:  Previous  73  74  75  76  77  78  79  80  81  82  83  84  85  86  87  88  89  90  91  92  Next

Last modified: May 25, 2011