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Guarantee Act of 1979 (LGA), Pub. L. 96-185, 93 Stat. 1324 (1980)
(codified as amended at 15 U.S.C. secs. 1861-1875, 2003, 2512
(1982)). Petitioner, like its predecessor, Chrysler, is an
accrual method taxpayer that manufactures and sells automobiles
and trucks. Petitioner’s principal place of business was in
Auburn Hills, Michigan, when its petition was filed.
Chrysler was faced with an economic crisis in 1979 that
resulted in Congress’ enacting the LGA on Chrysler’s behalf.
As the House Banking, Finance, and Urban Affairs Committee
recognized in its report on the LGA: “Without Federal financial
assistance in the form of loan guarantees, the Chrysler
Corporation will soon face bankruptcy and possible liquidation,
with substantial consequences for the nation’s economy, the
federal budget, the balance of payments and; above all, several
hundred thousand individual human beings.” H. Rept. 96-690, at 8
(1979). By way of the LGA, Congress provided Chrysler with up to
$1.5 billion in loan guaranties in return for Chrysler’s
satisfaction of certain conditions.
Two of these conditions required that employees of Chrysler
and its subsidiaries and affiliates make at least $587.5 million
in wage and benefit concessions and that Chrysler set up an
employee stock ownership plan meeting the requirements of both
sections 401(a) (qualified deferred compensation plans) and
4975(e)(7) (employee stock ownership plans). Two other
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