- 44 -
Hashimoto said that Burndy-US paid a control premium because
Burndy-US gained control over Burndy-Japan in 1973. We disagree
for reasons stated above pp. 27-41.
Hashimoto was inconsistent in his approach to 1973 and 1993.
For 1973, he relied on Furukawa’s and Sumitomo’s proposal based
on an analogous company method based on data for 2 years. For
1993, he chose a KPMG value based on an analogous company method
using data for 5 years. Finally, Hashimoto did not verify the
accuracy of the data that Furukawa and Sumitomo used in their
initial offer.
We conclude that Burndy-US did not pay Furukawa and Sumitomo
a control premium to acquire Burndy-Japan stock in 1973 but did
in 1993.
h. Conclusion Relating to the Voting Power Test
Petitioners point out that we and other courts have held
that a 50-percent shareholder has more than 50 percent of the
voting power of all of the stock if the taxpayer actually
controls the corporation, citing Koehring Co. v. United States,
583 F.2d 313 (7th Cir. 1978); Estate of Weiskopf v. Commissioner,
64 T.C. 78 (1975); Kraus v. Commissioner, 59 T.C. 681 (1973); and
Garlock Inc. v. Commissioner, 58 T.C. 423 (1972). Petitioners
cite these cases to support their contention that Burndy-US owned
more than 50 percent of the voting power of Burndy-Japan. We
disagree. These cases are distinguishable because, here, the
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