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That exception has no applicability to the instant case. When
Chrysler redeemed its common stock from the ESOT, the selling
shareholders were not acting as debtors, creditors, employees, or
vendees. Chrysler redeemed the stock from those shareholders in
their capacities as shareholders who wished to dispose of their
stock for its current value. They sold their stock, most of
which had been acquired over a period of years, at prices which
had been determined by trading on the New York Stock Exchange.
This is classically a capital transaction, and it involved only
those sellers of stock who choose to engage in the redemption.
The employees who did not choose to sell their stock received no
part of the amounts Chrysler now seeks to deduct as compensation,
although they had forgone the same pay raises as those who chose
to sell their stock. In addition, other employees, who had not
worked for Chrysler long enough when the ESOP was in effect, were
left out of the redemption altogether.
The fact that the UAW negotiated the sale of the common
stock does not change the origin and nature of the costs Chrysler
paid for the redemption. The provisions of the LGA placed the
UAW, perhaps anomalously, in the role of representative of the
largest single block of shareholders in Chrysler. The fact
remains that although these sellers of Chrysler common stock were
also employees of Chrysler, they received the cash Chrysler now
seeks to deduct in their capacities as owners and sellers of
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