Tribune Company, As Agent of and Successor By Merger to the Former the Times Mirror Company, Itself and its Consolidated Subsidiaries - Page 1

                                   125 T.C. No. 8                                     


                               UNITED STATES TAX COURT                                


             TRIBUNE COMPANY, AS AGENT OF AND SUCCESSOR BY MERGER TO THE              
            FORMER THE TIMES MIRROR COMPANY, ITSELF AND ITS CONSOLIDATED              
                             SUBSIDIARIES, Petitioner v.                              
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 17443-02.           Filed September 27, 2005.               


                    In 1998, Times Mirror’s investment subsidiary,                    
               TMD, divested itself of a legal publishing business                    
               through the Bender transaction.  The transaction was                   
               intended and designed to qualify as a tax-free                         
               reorganization under sec. 368, I.R.C.  R determined                    
               that the transaction was a taxable sale by TMD to Reed.                
               Held:  The primary consideration received in the                       
               transaction was control over $1.375 billion paid by                    
               Reed.  Held, further, the Bender transaction did not                   
               qualify as a tax-free reorganization because the terms                 
               and provisions of the contractual documents, as                        
               interpreted and implemented by Times Mirror and Reed,                  
               effected a sale.                                                       









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