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Examination of the voting, dividend, redemption, and
liquidation provisions of the documents, quoted at length in our
findings, confirms respondent’s view that only Times Mirror had a
continuing economic interest in the cash, and only Reed had a
continuing economic interest in Bender. The structure of MB
Parent and the dividend provisions assured that any dividends
paid to MB Parent from the operations of Bender would be paid to
Reed as dividends on MB Parent’s preferred stock. Moreover, when
the structure was ultimately unwound, TMD would own MB Parent and
the LLC and Reed would own Bender.
The foregoing factual analysis demonstrates that the
consideration received by TMD, as the investment subsidiary of
Times Mirror, was not common stock in MB Parent but was control
over the cash deposited in the LLC. In relation to the arguments
over expert testimony, as discussed below, petitioner asserts
that the common stock and the management authority cannot be
valued separately because it would have been unthinkable to
transfer them separately. But this argument does not aid
petitioner’s case. Recognizing that no one would separately
purchase either the common stock or the management authority
confirms respondent’s argument that common stock was not the only
consideration for the transfer and that the common stock, viewed
alone, did not have the value necessary for the transaction to
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