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…
1ConcurrenceBeghe, J.
I join the majority opinion in this case because I agree with its interpretation and application— even if it arguably amounts to an extension — of the Supreme Court’s reasoning in INDOPCO, Inc. v. Commissioner, 503 U.S. 79 (1992). Given the way that the line of battle was drawn and disputed by the parties, I’ve joined the majority in indulging the inference that long-term benefits to SCI resulted from the services of the investment bankers, justifying the disallowance as deductions through capitalization of their fees, particularly those fees that were generated by the done deal. However, I…
2Cases cited28 opinions
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- Indopco, Inc. v. CommissionerSupreme Court of the United States · 1992
- Woodward v. CommissionerSupreme Court of the United States · 1970
- Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.Supreme Court of Delaware · 1986
- Unocal Corp. v. Mesa Petroleum Co.Supreme Court of Delaware · 1985
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