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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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