La Rue v. Commissioner
United States Tax Court
Ps were general partners in Goodbody, a stock brokerage firm. Due to the failure of record-keeping technology to keep up with trading volume, Goodbody incurred large, anticipated "back office" liabilities to its customers and other stock brokerage firms, precipitating withdrawals of firm capital and violation of New York Stock Exchange rules.
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Ps were general partners in Goodbody, a stock brokerage firm. Due to the failure of record-keeping technology to keep up with trading volume, Goodbody incurred large, anticipated "back office" liabilities to its customers and other stock brokerage firms, precipitating withdrawals of firm capital and violation of New York Stock Exchange rules. In order to prevent the financial collapse of Goodbody, M Corp. agreed to assume Goodbody's business, all its assets and liabilities, subject to an obligation by Ps to pay to M any deficit in Goodbody's net worth. Held, liabilities attributable to an…
1Opinion of the Court
GERBER, Judge:
This is a consolidated action involving seven former general partners of Goodbody & Co., a broker-dealer in securities and commodities. This action is for redetermination of deficiencies arising out of the financial collapse of the Goodbody partnership and the accession to its assets and liabilities by Merrill, Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch). The issues for decision are: (1) Whether reserves reflecting “back office” errors are liabilities that may be included in the bases of petitioners’ partnership interests; (2) whether and to what extent the transfer of…
2Cases cited23 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- Crane v. CommissionerSupreme Court of the United States · 1947
- Security Flour Mills Co. v. CommissionerSupreme Court of the United States · 1944
- Commissioner v. TuftsSupreme Court of the United States · 1983
- United States v. Hughes Properties, Inc.Supreme Court of the United States · 1986
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3Cited by33 opinions
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- Jade Trading, LLC ex rel. Ervin Capital, LLC v. United StatesUnited States Court of Federal Claims · 2007
- Citron v. CommissionerUnited States Tax Court · 1991
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