Laidlaw Transportation, Inc. and Subsidiaries - Page 15

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               LWSI's only directors from September 1, 1985, to August 31,            
          1988, were DeGroote, Gowland, and Haworth.  LWSI's officers                 
          included Gowland as president from October 2, 1986, to January 5,           
          1987, Haworth as vice president for finance from October 2, 1986,           
          to August 31, 1988, and Cairns as secretary from September 1,               
          1985, to August 31, 1988.                                                   
          D.   LIIBV                                                                  
               1.   Coopers & Lybrand's Plan                                          
               By the mid-1980's petitioners were competing intensely with            
          WMI and BFI to buy solid waste services businesses.  In the                 
          summer of 1985, DeGroote, Cairns, and Haworth asked Coopers &               
          Lybrand to develop a tax strategy for LTL to help petitioners               
          compete with WMI and BFI in buying U.S. companies.  Coopers &               
          Lybrand also considered nontax factors.                                     
               Coopers & Lybrand recommended that LTL form LIL as a wholly-           
          owned Canadian subsidiary, and then form LIIBV, a Netherlands               
          subsidiary of LIL to be funded by capital contributions and non-            
          interest-bearing debt.  Coopers & Lybrand said that under this              
          plan:  (a) LTL could deduct interest it paid on funds it borrowed           
          to invest in LIL; (b) LIL could lend funds interest free to                 
          LIIBV, which could advance funds to Laidlaw's U.S. subsidiaries             
          as interest-bearing debt; (c) the U.S. subsidiaries could deduct            
          the interest with no withholding tax liability under a                      
          U.S./Netherlands treaty; and (d) the Laidlaw group would have               
          what Coopers & Lybrand called a "double deduction" of interest              
          expense (interest deduction in both Canada and the U.S.), with              





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