Commissioner v. Oswego Falls Corp.

FRANK, Circuit Judge.

The Commissioner contends that the taxpayer, without violation of the mortgage indenture, could have paid dividends in its unsecured notes (or other unsecured obligations) maturing more than “a year after their date.” There may perhaps be some doubt whether such obligations, if maturing before the mortgage bonds, would have violated the provisions of the indenture; but that is a question we need not consider. For, if dividends had been paid in unsecured obligations maturing after July 1, 1941, when the mortgage bonds were payable, those unsecured obligations would not…