Santa Fe Pac. Gold Co. v. Comm'r
United States Tax Court
SF was a wholly owned subsidiary of parent P. P spun SF off into a stand-alone entity. Two years after being spun off, SF faced a hostile takeover by competitor N. In order to avoid being taken over, SF entered into a merger agreement with white knight HS. The merger agreement provided for the payment of a termination fee should the agreement be terminated. Shortly thereafter N increased its offer. SF's board accepted the increased offer.
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SF was a wholly owned subsidiary of parent P. P spun SF off into a stand-alone entity. Two years after being spun off, SF faced a hostile takeover by competitor N. In order to avoid being taken over, SF entered into a merger agreement with white knight HS. The merger agreement provided for the payment of a termination fee should the agreement be terminated. Shortly thereafter N increased its offer. SF's board accepted the increased offer. SF paid a $ 65 million termination fee to HS. SF claimed a deduction for the amount of the termination fee on its 1997 tax return, which R disallowed. Held:…
1Opinion of the Court
SANTA FE PACIFIC GOLD COMPANY AND SUBSIDIARIES, BY AND THROUGH ITS SUCCESSOR IN INTEREST NEWMONT USA LIMITED, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Santa Fe Pac. Gold Co. v. Comm'r
No. 22956-06
United States Tax Court
132 T.C. 240; 2009 U.S. Tax Ct. LEXIS 11; 132 T.C. No. 12;
April 27, 2009, Filed
Santa Fe Pac. Gold Co. v. Comm'r, 130 T.C. 299, 2008 U.S. Tax Ct. LEXIS 17 (June 25, 2008)
SF was a wholly owned subsidiary of parent P. P spun SF off into a stand-alone entity. Two years after being spun off, SF faced a hostile takeover by competitor N. In order to avoid being taken…
2Cases cited29 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Indopco, Inc. v. CommissionerSupreme Court of the United States · 1992
- Commissioner v. HeiningerSupreme Court of the United States · 1943
- United States v. GilmoreSupreme Court of the United States · 1963
- Commissioner v. TellierSupreme Court of the United States · 1966
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