A.E. Staley Mfg. Co. v. Commissioner
United States Tax Court
This case concerns the proper tax treatment of investment bankers' fees and printing costs incurred by petitioner in response to a series of unsolicited (but eventually successful) offers to acquire petitioner's stock. Petitioner's board of directors rejected the first two offers made by the acquirer. Ultimately, however, the board unanimously (1) approved a plan of merger with the acquirer and (2) recommended the acquirer's third offer to shareholders.
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This case concerns the proper tax treatment of investment bankers' fees and printing costs incurred by petitioner in response to a series of unsolicited (but eventually successful) offers to acquire petitioner's stock. Petitioner's board of directors rejected the first two offers made by the acquirer. Ultimately, however, the board unanimously (1) approved a plan of merger with the acquirer and (2) recommended the acquirer's third offer to shareholders. Petitioner claims that, since the takeover was hostile, this case is distinguishable from National Starch & Chem. Corp. v. Commissioner, 93…
1Opinion of the Court
Contents
Page
FINDINGS OF FACT. 168
OPINION. 180
I. Introduction . 180
II. Transaction . 181
III. Consequences of the Acquisition for SCI and Its Shareholders ... 182
IV. National Starch and Its Progeny . 184
A. Sections 162 and 165 . 184
B. National Starch . 184
C. INDOPCO, Inc. 184
D. Victory Markets . 186
E. Federated Dept. Stores . 186
V. Discussion. 186
A. Arguments of the Parties. 186
B. Duties of the Board . 187
1. Arguments of the Parties. 187
2. The Law of Delaware . 188
3. Different Constituencies . 190
C. Competing Theories . 190
D. Expenditures for the Benefit of Another. 191
E. Capital Expenditures .…
2Cases cited31 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Indopco, Inc. v. CommissionerSupreme Court of the United States · 1992
- Aronson v. LewisSupreme Court of Delaware · 1984
- United States v. GilmoreSupreme Court of the United States · 1963
- Guth v. Loft, Inc.Supreme Court of Delaware · 1939
26 more not listed; retrieve them via the Exa API.
3Cited by32 opinions
- A.E. Staley Manufacturing Company and Subsidiaries v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1997
- Norwest Corp. v. CommissionerUnited States Tax Court · 1999
- Norwest Corp. v. Comm'rUnited States Tax Court · 1998
- Metrocorp, Inc. v. CommissionerUnited States Tax Court · 2001
- Connecticut Mut. Life Ins. Co. v. CommissionerUnited States Tax Court · 1996
27 more not listed; retrieve them via the Exa API.