T.C. Memo. 1996-506
UNITED STATES TAX COURT
PABST BREWING COMPANY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 18466-92. Filed November 12, 1996.
P brews and sells beer. During the relevant
years, many individuals and companies sought control
over P through means which included hostile takeovers,
tender offers, and proxy contests. Pursuant to an
agreement between P and H, H bought a majority of P's
shares in a public tender offer, and P distributed
certain assets to H in exchange for all of P's shares
held by H and the assumption by H of a certain
liability. In connection therewith, P and H entered
into an allocation agreement that set forth a dollar
amount for each transferred asset. P and R dispute
that the amount assigned to each asset is that asset's
fair market value. P claims that the fair market value
is significantly lower than the assigned amount. R
claims that the fair market value is significantly
higher than the assigned amount. Held: The aggregate
fair market value of the transferred assets equals the
amount set forth in the allocation agreement for all of
the assets. Held, further: The fair market value of
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