> The important thing is that the nonprofit (donated, tax-free) money doesn't flow into the forprofit section.

I am sure that is true. But the for-profit uses IP that was developed inside of the non-profit with (presumably) tax deductible donations. That IP should be valued somehow. But, as I said, I am sure they were somehow able to structure it in a way that is legal, but it has an illegal feel to it.