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The court held in Erie Lighting Co. v. Commissioner, supra at
885-886, that the preferred stock of ELC was not voting stock for
purposes of the applicable consolidation provisions because that
stock did not have the right to vote in the election of the board
of directors of ELC, which was entrusted with the management of
its business affairs, and therefore that stock did not have the
right to control that management.
Since Erie Lighting Co. v. Commissioner, supra, was decided,
pertinent rulings have, consistent with the rationale of the Erie
Lighting Co. case, considered the ability of stock to participate
in the management of a corporation through the election of one or
more directors in determining the existence of voting stock
and/or the extent of voting power for purposes of the consolida-
tion provisions. See, e.g., Rev. Rul. 69-126, 1969-1 C.B. 218;
I.T. 3896, 1948-1 C.B. 72. However, none of those rulings
involved the facts presented here. Nor did any of them suggest
that the power of the boards of directors involved in those
rulings, or of the members of those boards, was restricted or
limited, such as by completely taking away from those boards the
power to vote on certain matters relating to the management of
corporate business and affairs that were entrusted to those
boards under the applicable State law or by requiring a class
vote by different members of those boards on such board manage-
ment matters.
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