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conclude that Times Mirror’s control over the cash in the LLC was
not part of the consideration received in the Bender transaction
because it was not intended by Times Mirror or Reed to be a
“separate asset”.
Respondent argues that the Bender transaction did not
qualify under section 368(a)(1)(B) because TMD did not exchange
its Bender stock solely for voting stock. In addition,
respondent argues that petitioner has belatedly changed its
theory and should be precluded from doing so.
In form, at the conclusion of the Bender transaction, TMD
was the holder of MB Parent common stock and no longer owned
Bender common stock. Determination of whether the MB Parent
common stock had a value of $1.1 billion or, in the alternative,
whether the sole consideration exchanged for the Bender common
stock was the MB Parent common stock requires a factual analysis
of the totality of the Bender transaction. Because the same
facts lead us to our conclusions on both theories, we do not need
to decide whether petitioner is too late in asserting its section
368(a)(1)(B) argument.
Factual Analysis of the Bender Transaction
Not surprisingly, the parties differ significantly in their
descriptions of the Bender transaction. While paraphrasing
portions of the record, the parties cannot resist characterizing
events in a manner consistent with their respective positions.
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