Laidlaw Transportation, Inc. and Subsidiaries - Page 56

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          have sued, but did not, to enforce the agreements.  LIIBV                   
          repeatedly extended the due date for payments.  LIIBV returned              
          most of the money to petitioners on the same day that it received           
          payments from petitioners.  These facts show that LIIBV did what            
          LTL and DeGroote and his management team wanted, and did not deal           
          at arm's length.                                                            
               Petitioners contend that the fact that the public owned 21             
          percent of the stock of LII shows that LII dealt at arm's length            
          with LIIBV.  We disagree.  The public owned 21 percent of LII               
          stock before December 16, 1987, but did not own any LII stock               
          thereafter.  DeGroote and his core management team controlled               
          petitioners throughout the years in issue.                                  
               Petitioners contend that DeGroote sought independent                   
          directors and that Ferrill was independent.  Petitioners point              
          out that Ferrill convinced DeGroote to increase the repurchase              
          price of publicly-owned LII stock and that Ferrill was on a                 
          special committee to review financing proposals to pay for the              
          GSX acquisition, which petitioners contend shows that Ferrill is            
          independent.  We disagree that these facts establish that the               
          Laidlaw entities dealt at arm's length.  DeGroote loyalists                 
          controlled the Laidlaw entities, including boards of which                  
          Ferrill was a member.                                                       
               Petitioners point out that LIIBV had foreign directors.                
          This fact does not convince us that petitioners dealt with LIIBV            
          at arm's length.  Haworth's October 16, 1986, letter to LIIBV,              





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