Seiberling Rubber Co. v. Commissioner
United States Tax Court
1. Petitioner, which held about 79 per cent of the total unsecured claims against an insolvent corporation and owned about 75 per cent of the common stock and 49 per cent of the preferred stock of the debtor, caused all assets of the debtor to be transferred to a new corporation. The new corporation issued all of its capital stock to petitioner in full settlement of the greater part of petitioner's claim and gave a note to petitioner for the balance of the claim.
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1. Petitioner, which held about 79 per cent of the total unsecured claims against an insolvent corporation and owned about 75 per cent of the common stock and 49 per cent of the preferred stock of the debtor, caused all assets of the debtor to be transferred to a new corporation. The new corporation issued all of its capital stock to petitioner in full settlement of the greater part of petitioner's claim and gave a note to petitioner for the balance of the claim. Petitioner transferred 5 per cent of this stock to preferred stockholders of the debtor other than itself. The other creditors of…
1Opinion of the Court
OPINION.
Kern, Judge:
The first issue for consideration is whether the transactions conducted in 1934 whereby petitioner acquired the Kemitex Products, Inc., stock amounted to a nontaxable reorganization within the meaning of section 112 (b) (3), (4), or (5) of the Revenue Act of 1932.1
Petitioner’s primary contention that this was a nontaxable reorganization is based upon the provisions of section 112 (b) (5) of the 1932 Act. In support of this proposition petitioner argues, inter alia, as follows:
The Petitioner’s proprietary interest as creditor in the insolvent old Kemitex Company was…
2Cases cited13 opinions
- Pinellas Ice & Cold Storage Co. v. CommissionerSupreme Court of the United States · 1933
- Hollins v. Brierfield Coal & Iron Co.Supreme Court of the United States · 1893
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
- Helvering v. Southwest Consolidated Corp.Supreme Court of the United States · 1942
- LeTulle v. ScofieldSupreme Court of the United States · 1940
8 more not listed; retrieve them via the Exa API.
3Cited by10 opinions
- Capital Nat'l Bank v. CommissionerUnited States Tax Court · 1951
- Seiberling Rubber Co. v. Commissioner of Internal Rev.Court of Appeals for the Sixth Circuit · 1948
- Seiberling Rubber Co. v. United StatesUnited States Court of Claims · 1962
- Capital Nat'l Bank v. CommissionerUnited States Tax Court · 1951
- Duncan v. CommissionerUnited States Tax Court · 1947
5 more not listed; retrieve them via the Exa API.