- 5 -
in its G�nther stock, before taking into account the amounts at
issue in this case, was $7,374,438.
III. G�nther's Management and Operations
G�nther’s gesch�ftsf�hrer, Albert G�nther (Albert), and its
procurist, Hans Kampfrad (Kampfrad), controlled G�nther’s day-to-
day management and operations.6 Albert reported directly to
Flint’s president.
Most of G�nther’s products were switches, relays, and sensor
devices such as those used for air bags and braking systems. The
market for these products was highly cost-sensitive because
G�nther had several competitors that made similar products.
At some point before 1992, G�nther was an industry leader in
air bag sensor technology. Subsequently, however, new products
superseded G�nther's technology and eroded its competitive
advantage. Although G�nther owned patents for some of its
manufacturing processes, by May 31, 1992, G�nther's patents had
5(...continued)
German law, states that G�nther is a wholly owned subsidiary of
Gordos International Corp., and G�nther’s commercial report for
its FYE April 30, 1992, states that G�nther’s share capital was
transferred from Gordos International Corp. to Flint Electronics
Co. We accept the parties’ stipulation, however, because the
relevant facts regarding G�nther’s ownership by a member of the
affiliated group and petitioner’s adjusted basis in G�nther’s
stock are not in dispute.
6The positions of gesch�ftsf�hrer and procurist in a German
GmbH are similar to those of general manager and controller in a
U.S. company. However, because the gesch�ftsf�hrer and procurist
were the only members of G�nther’s senior management, they had
considerably more power and authority.
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