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International Paper Co. would issue a wood delivery order and/or
a log delivery order within 1 week of the interval to petitioner.
The order specified the species, volume, delivery points, and
other specifications for deliveries to be made each week during
the interval. International Paper Co. or its designee scaled or
weighed all wood delivered by petitioner upon delivery.
International Paper Co. had the right to refuse to accept
delivery of all or a portion of the wood if it did not meet the
specifications agreed to in the contract.
Petitioner supplied the mills with logs through various
business activities. These included: (1) Cutting timber on land
owned by petitioner or related entities; (2) cutting timber on
land owned by third parties--i.e., landowners not related to
petitioner, petitioner’s shareholders, petitioner’s subsidiaries,
or petitioner’s shareholders’ corporations (collectively,
unrelated entities); and (3) purchasing wood from unrelated
entities. Petitioner generally received payment for logs within
2 to 4 weeks of delivery.
The trees cut by petitioner grew at a rate of 3 percent per
year. It takes 30 to 50 years for these trees to reach maturity.
Petitioner’s business activities did not include the planting of
new trees. Petitioner was not in the business of operating a
nursery or sod farm. Petitioner was not in the business of
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Last modified: May 25, 2011