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United States, 473 F.2d 1217 (7th Cir. 1973). All the
circumstances surrounding the claim must be considered. See id.
at 1220.3
The District Court described the State of California’s
antitrust complaint in the following terms:
The State requests a preliminary injunction “preventing
and restraining [Alpha Beta and Lucky], and all persons
acting on their behalf, from taking any action, either
directly or indirectly, in furtherance of the proposed
acquisition of Lucky, and requiring Alpha Beta to hold
and operate separately all of Lucky’s California assets
and businesses pending final adjudication of the merits
of this action; and ... such injunctive relief,
including recission ... as is necessary and appropriate
to prevent the effect of the unlawful activities
alleged.” Complaint at 14. Furthermore, the State
seeks to “permanently enjoin [Alpha Beta and Lucky]
from carrying out any agreement, understanding, or
plan, the effect of which would be to combine the
supermarket business of [Alpha Beta] and Lucky.” * * *
[State of Cal. v. American Stores Co., 697 F. Supp.
1125, 1133 (C.D. Cal. 1988).]
The Supreme Court described the complaint in the following terms:
The State sued, claiming that the merger violates the
federal antitrust laws and will harm consumers in 62
California cities. The complaint prayed for a
preliminary injunction requiring American to operate
the acquired stores separately until the case is
decided, and then to divest itself of all of the
acquired assets located in California. * * *
[California v. American Stores Co., 495 U.S. 271, 274
(1990).]
3In Brown v. United States, 526 F.2d 135, 139 (6th Cir.
1975), legal expenses paid in settlement of a derivative action
were held to be nondeductible capital expenditures. The court
found that the origin of the derivative claim was the taxpayer’s
efforts to acquire the shareholder’s stock. The court stated
that although conserving the stock’s value was the immediate
purpose of the derivative action, the test of deductibility
relates to the origin rather than the purpose.
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