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appeal as a form of effective advertising. Even though Mr.
Menard had a personal interest in racing, any personal enjoyment
that he gained from Menards’s involvement in motor sports was
incidental to the benefits Menards’s business received through
its relationship with TMI.
Long before TMI’s incorporation, Menards used motor sports
as a way to publicize its business and continued that practice
after TMI’s creation. Mr. Menard testified that Menards’s intent
behind the TMI payments was to have the same racing benefits as
it did prior to TMI’s incorporation, acquire national and
international publicity through TMI’s notoriety, and promote
Menards’s products. When Mr. Menard formed TMI and named it
“Team Menard”, he indelibly associated the Menards stores with
the Indy racing team.
After carefully considering the evidence, we conclude that
to the extent we hold, infra, that the TMI expenses were
reasonable in amount, Menards’s primary motive for paying the TMI
expenses was to promote Menards’s business. Menards received
broad advertising exposure from its involvement with TMI. The
races provided opportunities for Mr. Menard and other Menards
executives to network with vendors and create and maintain
goodwill with customers. Moreover, had Menards not been
concerned about potential liability in the event of a racing
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