- 54 -
Another important factor is the testimony of the acquiring
corporation's top management. See Capri, Inc. v. Commissioner,
65 T.C. at 179; D'Arcy-MacManus & Masius, Inc. v. Commissioner,
supra at 450. Mr. Jackson, petitioner's CEO, Mr. Billings,
petitioner's COO, and Mr. Reed, petitioner's vice president of
finance, all testified that petitioner paid nothing for Tri-
Power's NOL's. Mr. Jackson and Mr. Wagner, petitioner's land
manager, also testified that they supported the acquisition of
Tri-Power because it satisfied all of petitioner's predefined
acquisition limitations. Additionally, Harry S. Welch, a member
of petitioner's board, testified that the board was primarily
concerned with the acquisition of reserves and that the NOL's
were presented as a matter of secondary importance. The
foregoing individuals were intimately involved in the decision to
acquire Tri-Power. Their testimony was credible. In conjunction
with other corroborating evidence contained in the record, their
testimony is an important factor supporting our conclusion that
business considerations were the principal purpose for the
acquisition of Tri-Power.
The dropdown, which, as we have found supra, was an integral
part of petitioner's plan to acquire Tri-Power, facilitated
petitioner's preexisting plan to adopt a holding company
structure. We recognize, as respondent so vigorously argues,
that the dropdown also enabled petitioner to use the Tri-Power
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