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dating distribution to Mavco, its sole stockholder. Id. at 94.
As a consequence, Sales no longer had any assets with which to
satisfy its unpaid tax liabilities for 1944, 1945, and 1946.
Because Mavco assumed all of the liabilities of Sales, respondent
could have sought to collect all of the unpaid taxes of Sales
from Mavco. However, respondent chose to seek to collect $10,000
of those taxes from Ms. Vendig on the ground that she was liable
for that amount as a transferee of the assets of Sales. Id.
In Vendig v. Commissioner, supra at 95, the U.S. Court of
Appeals for the Second Circuit (Court of Appeals for the Second
Circuit) concluded: "By exchanging stock of Sales for stock of
Mavco petitioner did not remove cash or other property from
Sales, thereby harming creditors of Sales who were entitled to be
paid before any distributions to shareholders." The Court of
Appeals for the Second Circuit held that, because Ms. Vendig did
not receive, directly or indirectly, any property of Sales, she
was not a transferee of Sales within the meaning of section 311
of the Internal Revenue Code of 1939, the predecessor to section
6901. Id. at 94. In so holding, the Court of Appeals for the
Second Circuit appears to have relied on the form of the exchange
of Ms. Vendig's Sales preferred stock for preferred stock in
Mavco when it stated:
We accept the following principles: Where the vendee
issues its stock to the vendor corporation in return
for assets of the vendor, then that stock becomes the
asset of the vendor, and the stockholders who receive
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