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redemption through subsequent public offerings of Ronnie’s stock
existed, and no corporate minutes were offered into evidence to
substantiate such a plan. In addition, funding the redemption
through subsequent public offerings of Ronnie’s stock was beyond
the control of the taxpayers. Although this Court acknowledged
the taxpayers’ apparent intent that subsequent public offerings
be made, the taxpayers had made no promise to the underwriter,
nor was there any evidence of an agreement to make another public
offering.
5. Bleily & Collishaw, Inc. v. Commissioner
In Bleily & Collishaw, Inc. v. Commissioner, 72 T.C. 751
(1979), the taxpayer owned 30 percent of a corporation. The
majority shareholder wanted sole control over the corporation,
and the taxpayer was willing to sell all of its shares to the
majority shareholder. However, because the majority shareholder
did not have sufficient funds to purchase all of the taxpayer’s
shares at that time, the majority shareholder purchased only a
portion of the taxpayer’s stock. Thereafter, over a period of
approximately 23 weeks, the corporation redeemed the balance of
the taxpayer’s stock in increments tied to the availability of
money to fund the redemptions. Although the taxpayer was under
no contractual or other legal obligation to sell the rest of its
shares or have them redeemed if and when money became available
to fund additional acquisitions, this Court found that the
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