- 55 -
and remanding T.C. Memo. 1967-187. If a transaction is
controlled by related entities, the form and labels used may not
signify much because the parties can mold the transaction to
their will. See Anchor Natl. Life Ins. Co. v. Commissioner, 93
T.C. 382, 407 (1989).
Petitioners contend that the transactions at issue were
negotiated and executed at arm's length and that LTL and DeGroote
and his management team did not control LIIBV and petitioners.
We disagree that the transactions were at arm's length. DeGroote
and his management team controlled all of the Laidlaw entities,
including petitioners and LIIBV.
Petitioners contend that LIIBV lent money to petitioners
that it had received as interest income under separately
negotiated arm's-length transactions. We disagree. The LTL
management group controlled petitioners and LIIBV. The existence
of a common chair, directors, officers, and core management team,
and the fact that there were related entities with interlocking
directorates, all indicate that the transactions at issue were
not negotiated at arm's length.
DeGroote and his management team developed and implemented
an elaborate plan to transfer funds between the Laidlaw entities.
For example, by letter dated October 16, 1986, Haworth directed
LIIBV to change the terms governing the advances to U.S.
subsidiaries and make those changes effective "as of" September
1, 1986. LIIBV did exactly what Haworth directed. LIIBV could
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