-60-
There is no prerequisite that arm’s-length bargaining be strictly
adversarial or acrimonious.
Regardless of whether the Schutt I and II transactions
should be subjected to the heightened scrutiny appropriate in
intrafamily situations, the record here is sufficient to show
that the negotiations and discussions were more than a mere
facade.12 The Court concludes that the transfers to Schutt I and
II satisfy the bona fide sale requirement for purposes of
sections 2036 and 2038.
Adequate and Full Consideration
In this Court’s recent discussion of the adequate and full
consideration prong in Estate of Bongard v. Commissioner, 124
T.C. at __ (slip op. at 48-49), four factors were noted in
support of a finding that the consideration requirement had been
met: (1) The interests received by the participants in the
12 The Court also notes that Wilmington Trust Company (WTC)
was founded in 1903 by the duPont family and has among its
clients numerous duPont descendants. According to public filings
with the Securities and Exchange Commission, WTC subsequently
became the principal operating and banking entity of Wilmington
Trust Corporation, a financial holding company which as of Dec.
31, 1997, was publicly traded with 33,478,113 shares outstanding
and 10,164 shareholders of record, had total assets of $6.12
billion, and possessed stockholders’ equity of $503 million.
Given this size and scope, WTC’s historical connection to the
duPont family is not germane to our analysis. Likewise, although
Mr. Sweeney has served as a director of WTC and/or Wilmington
Trust Corporation since 1983 and his firm has served as outside
counsel to WTC, he during 1997 was one of 21 directors, and both
Mr. Sweeney and Mr. Howard testified credibly that the
relationship made the participants more circumspect, rather than
less, in their dealings.
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