- 42 - representative responsible for negotiating the terms of the Reorganization Agreement believed that the fair market value of the Securities was $460 million. Respondent's contention that the fair market value of the Facilities was $2,099,970,000, although facially plausible, is not established. Even if correct, however, it does not necessarily follow that the fair market value of the Facilities was equal to the fair market value of the stock of the Subsidiaries owning those Facilities. Nor does it necessarily follow that the fair market value of the Securities was equal to the liquidation value of the Preferred Stock. We find no evidence that the parties to the Acquisition agreed that the fair market value of the Securities was $460 million. Indeed, on audit, the respondent took a different position, valuing the Preferred Stock at liquidation value of $50 per share and the Common Stock Warrant at $5.98 per warrant for a total value for the Securities of $566,093,446. Furthermore, for financial and tax reporting purposes, neither petitioners nor HealthTrust adhered to the purported agreed value. In sum, we think that the cases on which respondent relies are distinguishable from the facts of the instant case. In each of those cases one of the parties to an agreement was challenging a value or characterization agreed upon in the contract. E.g., North American Rayon Corp. v. Commissioner, 12 F.3d 583 (6th Cir. 1993); Sullivan v. United States, 618 F.2d 1001 (3d Cir. 1980);Page: Previous 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Next
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