- 5 - The Restructuring and Spinoff Prior to summer 1986, petitioner had been the common parent of an affiliated group of corporations (the affiliated group) on whose behalf it filed consolidated Forms 1120, U.S. Corporation Income Tax Return. In spring 1985, petitioner’s management developed a plan to restructure the ownership of its businesses through an inversion and spinoff. Under the plan, petitioner would organize a wholly owned subsidiary, the Interlake Corporation (Interlake); Interlake would then organize a wholly owned subsidiary (Newco Sub 1), followed by Newco Sub 1's organization of its own wholly owned subsidiary (Newco Sub 2). Following the organizations of these new corporations, petitioner would transfer its assets to Interlake and merge with Newco Sub 2, with petitioner surviving as a wholly owned subsidiary of Newco Sub 1. In connection with the merger of Newco Sub 2 into petitioner, each outstanding share of petitioner’s common stock would be converted into a share of common stock of Interlake, and the shares of Interlake that petitioner owned prior to the merger would be canceled. Petitioner would next organize the Interlake Companies as a wholly owned subsidiary and transfer to it all the shares of the subsidiaries that were then owned by petitioner, with the exception of Alabama Metallurgical Corporation (AMC), which remained a subsidiary of petitioner, in exchange for shares ofPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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