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interest in a viable corporation to a fixed right to receive
cash.
The tender or guarantee of more than 50 percent of the
outstanding shares of AHC stock was the functional equivalent to
a vote by the shareholders of AHC approving the merger. The
terms of the tender offer provided that DC Acquisition, with the
acquisition of a majority of AHC stock, could assure that the
requisite number of affirmative votes in favor of the merger
would be received even if no other shareholder voted in favor of
the merger. Therefore, with the exception of the hypothetical
possibility that a sufficient number of tendered or guaranteed
shares of AHC stock could be withdrawn, DC Acquisition was
positioned to proceed unilaterally with consummation of the
merger by the close of business on August 31, 1988.
Shareholders who tendered their shares maintained withdrawal
rights prior to the expiration date of the tender offer. We
believe that the existence of withdrawal rights and the potential
ability of AHC shareholders to withdraw shares sufficient to make
the number of shares tendered or guaranteed fall below a majority
of the outstanding shares is analogous to the ability, in theory,
of shareholders to rescind a prior shareholder vote approving a
merger agreement or a plan of liquidation. In Hudspeth v. United
States, supra, and Kinsey v. Commissioner, 477 F.2d 1058 (2d Cir.
1973), the issue as to whether the plan of liquidation was
theoretically irreversible was not a significant factor in the
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