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and International Paper Co., and from smaller landowners. For
stumpage permits with major timber landowners, the landowner’s
foresters identified the trees to be cut. For stumpage permits
with smaller landowners, petitioner’s foresters identified the
trees to be cut.
3. Financing Arrangements
As another business activity, petitioner entered into
purchase financing arrangements with unrelated entities. Under
these arrangements, petitioner lent the unrelated entity funds to
purchase woodland. The unrelated entity paid interest to
petitioner, gave petitioner a security interest in the land and
logs, and sold the logs to petitioner. Petitioner’s foresters or
log buyers surveyed the property and identified and priced the
marketable timber. In some arrangements, petitioner hired
cutting crews. In other instances, petitioner merely identified
and purchased the marketable timber and then sold and delivered
it to the mill.
4. Cutting Agreements With Unrelated Landowners
Petitioner also derived revenue from cutting agreements with
unrelated landowners. Under these cutting agreements, a
landowner hired petitioner to cut and transport timber to the
mills designated by the landowner. The landowner paid petitioner
a fixed rate per unit delivered.
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Last modified: May 25, 2011