- 37 -
consequences in the sale of a business; and a concern for the
administrative burdens and possible whipsaw problems that the
Commissioner could face absent the rule. Commissioner v.
Danielson, supra at 775. Where those underlying policy
considerations were absent, the Court of Appeals for the Third
Circuit has found the Danielson rule inapplicable. See Strick
Corp. v. United States, 714 F.2d 1194, 1206 (3d Cir. 1983);
Amerada Hess Corp. v. Commissioner, 517 F.2d 75, 86 (3d Cir.
1975), revg. White Farm Equip. Co. v. Commissioner, 61 T.C. 189
(1973). Other courts have similarly found the Danielson rule
inapplicable where those underlying policy considerations were
absent. Comdisco, Inc. v. United States, 756 F.2d 569, 578 (7th
Cir. 1985); Harvey Radio Lab., Inc. v. Commissioner, 470 F.2d
118, 120 (1st Cir. 1972), affg. T.C. Memo. 1972-85; Freeport
Transp., Inc. v. Commissioner, 63 T.C. 107, 116 (1974).
Petitioners contend that the Reorganization Agreement's mere
reference to the stated liquidation value of the Preferred Stock
was a recital of the consideration that did not constitute an
agreement as to fair market value of the Securities. In support
of their contention, petitioners rely on Campbell v. United
States, 228 Ct. Cl. 661, 661 F.2d 209 (1981), wherein the Court
of Claims held that a contract providing that the shareholders of
a corporation would sell their stock for "(a) $21 million in
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