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the two-stage transaction was the comfort of the foreign
investors. They had conducted a thorough due diligence and
uncovered a number of concerns. The creation of a two-stage
transaction permitted them to become involved in the entities in
order to decide whether they wished ultimately to acquire a
larger financial commitment and shareholding, along with the
acquisition of the DHL trademark.
Initially, the foreign investors collectively purchased a
12.5-percent interest in DHLI/MNV, but they would not have been
able to recoup their investment if they had not opted
collectively to acquire an additional 45 percent of the entities
and/or the DHL trademark. Their ability to control the boards
gave them a form of assurance or security to protect their
initial investment and to permit closer scrutiny and involvement
if they so desired. The boards, however, did not control the
day-to-day operations of DHLI/MNV, and the foreign investors’
employee presence in the operating entities was de minimis during
the interim period (late 1990 to late summer 1992).
The structure of the transaction through the interim period
also included several assurances and protections for the DHL
shareholders. For example, the DHL shareholders had to approve:
Any board action that changed the employment status of Lupo and
certain other employees; the issuance of DHL shares or other
related securities; certain actions concerning debt or leases;
and changes in DHL’s auditors or accounting policy. In addition,
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