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legislative attempts to prevent abuse, and cases discussing
continuity of proprietary interest as “the judicial bulwark and
backstop for limiting deferral [nonrecognition] to the kinds of
transactions that Congress intended should qualify.” See
Pinellas Ice & Cold Storage Co. v. Commissioner, 287 U.S. 462
(1933); Cortland Specialty Co. v. Commissioner, 60 F.2d 937 (2d
Cir. 1932). Petitioner responds with the assertion that “Stock
as consideration has always satisfied” the continuity of
proprietary interest requirement “even when the stock conveys a
highly attenuated economic interest in the acquiring
corporation.” Here, however, petitioner is again assuming that
stock was the sole consideration for the divestiture of Bender–-
an assumption we reject under the facts of this case for the
reasons discussed above. Moreover, the interest of the MB Parent
common stock held by TMD in the Bender operations is not merely
“highly attenuated”; it is expressly negated by the evidence.
Petitioner does not address Minn. Tea Co. or West Coast
Mktg. Corp. Petitioner relies on Esmark, Inc. v. Commissioner,
90 T.C. 171 (1988), affd. without published opinion 886 F.2d 1318
(7th Cir. 1989), as demonstrating the limitations on applying
substance over form analysis to recast a transaction that, on its
face, complies with the formal requirements of a statute.
Respondent notes that Esmark, Inc. reaffirmed the notion that a
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