Laidlaw Transportation, Inc. and Subsidiaries - Page 16

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          minimal income tax liabilities in The Netherlands, Canada, or the           
          United States.                                                              
               2.   Formation of LIL and LIIBV; Dutch Tax Rulings                     
               On September 25, 1985, LTL formed LIL, a Canadian                      
          corporation.  LTL has always been the sole shareholder of LIL.9             
          LTL and its subsidiaries contributed equity to LIL which was its            
          sole source of funds during the years in issue.10                           
               DeGroote, Haworth, and Cairns were directors of LIL from               
          September 25, 1985, to August 31, 1988.  From September 25, 1985,           
          to August 31, 1988, DeGroote was president and Haworth was vice             
          president for finance.  Cairns was vice president and secretary             
          from September 25, 1985, to December 10, 1987, and secretary from           
          December 10, 1987, to August 31, 1988.  Jerry Pekaruk (Pekaruk)             
          was controller from September 25, 1985, to December 10, 1987.               
          Robert E. Duncan (Duncan) was vice president from December 10,              
          1987, to August 31, 1988.  Haworth supervised Pekaruk and Duncan.           
               On December 2, 1985, Coopers & Lybrand received the first of           
          several Dutch tax rulings that LIL's interest-free loans to LIIBV           
          would be treated as capital contributions rather than profits for           
          purposes of Dutch income and withholding taxes.                             
               On December 30, 1985, LIL formed LIIBV in The Netherlands as           
          a 100-percent owned subsidiary.  LIIBV was a corporation for U.S.           




               9 From the time LIL was formed, LIL owned all of the stock             
          of LIBL, a Barbados corporation.                                            
               10 LIL also received a dividend from LIIBV in February 1988.           




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