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July 31, 1998, rather than the $52,964,160 amount that had been
determined by the IRS in the statutory notice of deficiency.
ULTIMATE FINDINGS OF FACT
The primary consideration received by Times Mirror, through
TMD, for transferring control over the operations of Bender to
Reed was control over $1.375 billion paid by Reed, through
MB Parent, to the LLC.
The agreements and corporate organization documents entered
into by Times Mirror and Reed negated any meaningful fiduciary
obligations between Times Mirror and Reed with respect to Times
Mirror’s control over the cash or Reed’s operation of Bender.
The MB Parent common stock held by TMD had a value of less
than $1.1 billion and less than 80 percent of the $1.375 billion
paid by Reed.
The Bender transaction effected a sale of Bender by TMD to
Reed.
OPINION
Section 354(a) states the general rule that “No gain or loss
shall be recognized if stock or securities in a corporation a
party to a reorganization are, in pursuance of the plan of
reorganization, exchanged solely for stock or securities in such
corporation or in another corporation a party to the
reorganization.” Section 356 requires recognition of gain from
an exchange in which property other than that permitted under
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