Commissioner v. Timmer

MOORMAN, Circuit Judge.

Prior to 1920, I. C. Bradbury and Earl C. Eifert were employed by a corporation engaged in the investment banking business. In March, 1920, they, with another employee, Kirlchuff, determined to sever their connection with the corporation and set up a business of their own. The stock of the corporation was then owned by three men, who, in order to retain the three employees, entered into a contract with them on April 1, 1920, agreeing on behalf of the corporation to reorganize it with a new capital structure consisting of an equal number of shares of preferred and common…