Ramco v. H-K Contractors, Inc.

McDEVITT, Justice.

In 1984, H-K Contractors, Inc. (H-K) reorganized following a difference of opinion by the three principal shareholders, Ranstrom, Charles and Foster. Under the reorganization plan, Ranstrom was to “spin-off” to form Rameo, Inc., and H-K was to transfer certain corporate assets to Rameo. Part of the transfer of assets to Rameo was 24.26% of tax savings to H-K due to its accumulated net operating loss carryover. At issue in this case is the distribution of that net operating loss tax carryover (NOL).

The reorganization plan also included a sale by Rameo to Ada Sand and Gravel…