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ULTIMATE FINDINGS OF FACT .................. 106
OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Factual Analysis of the Bender Transaction ......... 109
Times Mirror’s View of the Bender Transaction ........ 111
Fiduciary Obligations Among the Parties ........... 114
Consideration for the Transfer of Bender to Reed ...... 118
Valuation of MB Parent Common Stock ............. 121
Pertinent Precedents .................... 125
Evidentiary Matters ..................... 133
COHEN, Judge: Respondent determined a deficiency of
$551,510,819 with respect to petitioner’s Federal income tax for
1998. The notice of deficiency recharacterized as taxable two
transactions treated by petitioner as tax-free reorganizations.
This opinion addresses the so-called Bender transaction only.
The principal issues for decision are:
(1) Whether the Bender transaction qualifies as a
reorganization under either section 368(a)(1)(A) and (2)(E) or
section 368(a)(1)(B) and, if so,
(2) whether section 269 nonetheless dictates that gain be
recognized on the Bender transaction.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue.
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Last modified: May 25, 2011