Hospital Corporation of America and Subsidiaries - Page 42

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          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);             




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