Reason could be fiduciary duties owed by directors of the dad’s company. As a director you can’t give away company assets at below market value, without shareholder consent. If there were shareholders in the company other than the dad, then those shareholders could have sued the dad for breaching the duties he owes to the company. So if the other shareholders refused to give informed consent to a below market value deal, the only way for it to happen was to do a deal that made those shareholders happy.
Of course, they just shouldn't have included CD Baby as being owned by the other corporation. But, assuming there was some unspoken reason that had to happen, The other shareholders would have needed to be involved in the initial purchase/loan as well.
