- 34 -
price for that stock.13 In addition, in Vendig v. Commissioner,
supra, the Court of Appeals for the Second Circuit did not in-
dicate that Ms. Vendig's exchange of her Sales preferred stock
for Mavco preferred stock of equal value was contingent on
Mavco's purchase of all of the assets of Sales. In contrast, in
the instant case, we have found that the Scotts' acquisition of
AST stock in the MSSTA transaction was contingent upon, inter
alia, the closing of the asset purchase agreement between AST and
MSSTA.
Another distinction between Vendig v. Commissioner, supra,
and the present case is that in Vendig the tax liability of Sales
in question did not arise as a result of Ms. Vendig's exchange of
her Sales stock for Mavco stock of equal value and the liqui-
dation of Sales, and the amount of that tax liability was not
affected by the Court of Appeals for the Second Circuit's holding
in Vendig that the form of those transactions controlled the
transferee liability issue presented there. Vendig v. Commis-
sioner, supra at 96-97. In the instant case, the tax liability
12(...continued)
the Scotts acquired pursuant to the subscription agreements for
the nominal cash amount of ten cents a share.
13 Although urging that the form, and not the substance, of the
MSSTA transaction is controlling here, petitioners nonetheless
contend that, despite the form of their respective purchases of
10.5 percent of AST's stock, as reflected in the subscription
agreements, each of them, in substance, exchanged a 24-percent
stock interest in MSSTA for a 10.5-percent stock interest in AST.
We shall address that contention below.
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