Kentucky Natural Gas Corp. v. Commissioner

1. Reorganization under section 112(i)(1) of the Revenue Act of 1932 was effected when a new corporation acquired substantially all the assets of an insolvent corporation then in receivership pursuant to a reorganization plan consummated with the aid of the courts in which receiverships were pending. The foreclosure sales did not break the continuity of interest, as prior thereto the creditors of the old corporation had stepped into the shoes of the stockholders when the latter lost their participation rights by reason of the insolvency of the debtor corporation. It is immaterial that the…