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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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