Alumax Inc. and Consolidated Subsidiaries - Page 57

                                       - 49 -                                         
          In support of the exception that they carve out of their mechani-           
          cal test, petitioners assert:                                               
                    The six matters requiring approval of each class                  
               of directors in the case of Alumax covered a narrow set                
               of actions, such as mergers, material acquisitions and                 
               dispositions and transactions with affiliates, that                    
               frequently are the subjects of mechanisms, such as                     
               class voting, intended to protect minority stockhold-                  
               ers.  * * *  They fall far short of the unlimited list                 
               of matters on which the preferred stockholders could                   
               have voted in Erie Lighting [Co. v. Commissioner, 93                   
               F.2d 883 (1st Cir.), revg. 35 B.T.A. 906 (1937)], or                   
               would have been prevented from voting on in [Rudolph]                  
               Wurlitzer [Co. v. Commissioner, 81 F.2d 971 (1936),                    
               affg. 29 B.T.A. 443 (1933)], had those stockholders                    
               known of and tried to exercise their voting rights.                    
               In urging application of their mechanical test, petitioners            
          not only contend that the Court should ignore the respective di-            
          rector and stockholder class voting that was required on the                
          director and stockholder restricted matters, they also assert               
          that we should disregard (1) the mandatory dividend provision and           
          (2) the objectionable action provision.  That is because, accord-           

          13  (...continued)                                                          
          appear to address that requirement.  Although not altogether                
          clear to us, it appears, and we shall assume, that petitioners              
          contend in their reply brief that the stockholder class voting              
          requirement should be ignored for purposes of sec. 1504(a)(1) for           
          the same reasons that petitioners claim the director class voting           
          requirement should be ignored.  Apparently, petitioners' position           
          with respect to the stockholder class voting requirement also was           
          difficult for the IRS to grasp.  We draw this conclusion because            
          in Tech. Adv. Mem. 94-52-002 (Aug. 26, 1994), which was issued by           
          the IRS to petitioners on the question under sec. 1504(a)(1)                
          presented here, the IRS noted that petitioners had taken incon-             
          sistent positions as to whether "the Charter required each class            
          of shareholders to approve the Restricted Matters, at times                 
          seeming to acknowledge the existence of this requirement and most           
          recently disputing its existence."                                          





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