Unfair Pricing

Ford Motor Co. likely didn't imagine its "squeeze out" offer to the minority shareholders of its Canadian subsidiary still would be in limbo 11 years after the initial offer in 1995.

Indeed, no one could have blamed Ford for being somewhat smug when Ford Motor Co. of Canada's (Ford Canada) minority shareholders sued Ford for using an unfair internal transfer-pricing system (TPS)--the mechanism by which conglomerates allocate profits between their various corporate entities--to dilute Ford Canada's value. After all, the multinational's TPS had been in place since 1965, and both the Canada Revenue Agency and the IRS had approved the arrangements.


Julius Melnitzer

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