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make business acquisitions or any other transaction to
the benefit of Times Mirror. The only limitation is
that Times Mirror may not upstream LLC assets to
itself.
* * * * * * *
Times Mirror has the ability to ensure that the Board
of Directors of Acquisition Parent may not do anything
that may affect the control or viability of the LLC.
Certain board actions require the unanimous vote of the
Board. These include:
• the incurrence of indebtedness or guarantees of
indebtedness of Acquisition Parent
• the sale, transfer or other disposition, pledge or
assignment of any portion or all of its LLC
interest
• the issuance of any other securities of
Acquisition Parent
All of these factors indicate that Times Mirror not
only controls the assets of the LLC, but also is the
beneficiary of all of the ownership risks and rewards
of the LLC. * * *
We cannot improve on the descriptions of the Bender
transaction in the above contemporaneous statements of the
participants. Little more would be required to conclude that the
Bender transaction was, in substance, a sale. The issue in this
case, however, is to determine whether the “reorganization”
structure satisfies the requirements of sections 354(a) and 368
and precludes taxation of the gain derived from the transaction.
Fiduciary Obligations Among the Parties
In the context of the dispute over the value of the MB
Parent common stock received by TMD, as discussed below,
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