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that the LINKS stock was exchanged for debt assumption rather
than forgiveness of Mr. Combrink’s liability, the section 304
calculus does not turn on the basis of such labels, at least not
in the circumstances of this case. As a practical matter, there
exists no substantive difference between a corporation’s
canceling versus assuming a debt owed to itself. We thus treat
the terms as synonymous on these facts and equally applicable to
the release of Mr. Combrink’s liability.
Lastly, we note that whatever particular abuses may have led
to the enactment of section 304, we may not judicially create a
supposed policy-based exception where a transaction falls within
the plain language of the statute as written. We therefore need
not parse whether the December 1996 transfer did or did not
effect something akin to a bailout of earnings. The transaction
meets the only two elements set forth in section 304(a) and
hence, absent a specific statutory exception, must be recast as a
redemption.
II. The Exception--Section 304(b)(3)(B)
Section 304(b) provides an exception to the statute’s
operation. Although section 304(a) is expressly stated to
override section 351 in most cases where both are potentially
applicable, see sec. 304(b)(3)(A), section 304(b)(3)(B)
authorizes the following limited exception:
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