[gnso-vi-feb10] Fwd: Note from Scott Austin -- control/percentages

["Mike O'Connor" <mike@xxxxxxxxxx>]

hi all,

Scott meant to copy the list on this note to me, but he did it from a 
smartphone and it picked up the wrong address.

Begin forwarded message:

> From: "Austin, Scott" <SAustin@xxxxxxxxx>
> Date: May 24, 2010 3:44:50 PM CDT
> To: <mike@xxxxxxxxxx>, <owner-gnso-vi-feb10@xxxxxxxxx>
> 
> Mikey:
> 
> I didn't get to finish my thought on the call questioning the focus on 
> percentages alone as a guage for control  as a red herriing,  but since the 
> debate over percentages took up a lot of time I thought I should clarify my 
> point an extra step as I have seen bald percentages used as a subterfuge or 
> worse, create a false sense of security in the corporate context. 
> 
> As I mentioned on the chat thread that contol on a purely percentage basis 
> usually refers to 51 percent majority interest and anything less is not a 
> controlling interest from a voting standpoint. But even a majority interest 
> percentage cannot be viewed as contolling in a vacuum.  As much as less than 
> 51 percent is typically thought of as not having control (and 15 percent is 
> well below that) even a 1 percent owner has control if the organization's 
> organic documents (which will probably not be publicly available) require 
> unanimoius consent to act on a particular matter (e. g. Adoption of the 
> registry's corporate policy on re-deployment of expired domain names by its 
> registrars). 
> 
> More to the point, the real issue that is often frequently overlooked is that 
> the low percentage owner (let's say 15 percent or less ownership in the 
> registry) could  still have the right to 100 percent access to company 
> records and informationn including the registry database of expired names and 
> every other trade secret in the registry organization. Will ICANN be auditing 
> each applicant entity's articles and bylaws before duriing and after 
> application filing? Is this a point in favor of 100 percent separation? Or 
> jiust requiring contractual safeguards of registry database access by partial 
> owner registrars. What if 4 different registrars each own 15 percent in the 
> same registry? Permitted or aggregated as a "class" with too much control?
> 
> 
> Scott
> 
> 
> 
> Any federal tax advice contained herein or in any attachment hereto is not 
> intended to be used, and cannot be used, to (1) avoid penalties imposed under 
> the Internal Revenue Code or (2) support the promotion or marketing of any 
> transaction or matter. This legend has been affixed to comply with U.S. 
> Treasury Regulations governing tax practice.
>