- 39 -
assumed the liabilities of Bates and issued its stock to the
stockholders of Bates in exchange for all of Bates' assets.
Thus, Standard did transfer significant consideration to Bates in
exchange for Bates' assets.
We conclude that Bates Motor Transp. Lines, Inc. v.
Commissioner, supra, supports respondent's position that the
substance, and not the form, of the MSSTA transaction controls
our resolution of the transferee liability issues presented.
We also conclude that Hunn v. United States, supra, supports
respondent's position that the substance, and not the form, of
the MSSTA transaction governs our determination of the transferee
liability issues in this case, and we find petitioners' con-
tention that the Hunn case is distinguishable from the present
case to be without merit. In Hunn v. Commissioner, 60 F.2d at
430, the United States brought a suit in equity against certain
individuals as the former stockholders of Young Bros. Wall Paper
& Paint Company (Young) to recover income tax due from Young
(Young's tax liability). The form of the transaction in Hunn was
as follows: Subsequent to the year to which Young's tax lia-
bility pertained, the stockholders of Young passed a resolution
authorizing Young (1) to sell all of its assets to Waggener Paint
& Glass Company of Kansas City, Missouri (Waggener), for $54,000
and (2) thereafter to liquidate its affairs and dissolve. Hunn
v. Commissioner, supra at 431. At the same time, the stock-
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