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and at least 80 percent of the total number of shares of all
other classes of stock of the corporation.” Respondent argues
that TMD’s gain on the Bender transaction is taxable unless the
fair market value of qualifying consideration, the MB Parent
common stock, was at least equal in value to a “controlled block”
(80 percent) of Bender stock. The parties agree that this
requirement means that the MB Parent common stock must have had a
value of $1.1 billion for the transaction to qualify as a reverse
triangular merger.
Alternatively, and in order to assert reliance on certain
rulings of respondent, petitioner argues that the Bender
transaction qualifies under section 368(a)(1)(B), which provides:
SEC. 368(a). Reorganization.--
(1) In general.–-For purposes of parts I and
II and this part, the term “reorganization”
means--
* * * * * * *
(B) the acquisition by one corporation,
in exchange solely for all or a part of its
voting stock (or in exchange solely for all
or a part of the voting stock of a
corporation which is in control of the
acquiring corporation), of stock of another
corporation if, immediately after the
acquisition, the acquiring corporation has
control of such other corporation (whether or
not such acquiring corporation had control
immediately before the acquisition);
Petitioner’s alternative position would not require valuation of
the MB Parent common stock. It would, however, require us to
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