Explore a recent M&A case involving a creative stock acquisition strategy with unexpected tax consequences. Learn how an IRS ruling imposed $10 million in penalties and interest on investors. Get insights into the legal complexities of midco transactions and their…
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Creative Stock Acquisition: Unpacking the $10 Million Tax Costs and Interest
Posted in asset vs stock deal, midco transaction, tax penalties and additions, transferee liability for taxes IRC Section 6901, Uniform Fraudulent Transfer Act or Uniform Voidable Transfer Act Tagged with: Alta V Limited Partnership, Asset acquisition, Business Sale, case analysis, creative tax planning, interest, investor liability, IRS Ruling, legal complexities, M&A legal blog, midco transaction, penalties, stock acquisition, tax consequences, Tax Court
Court finds “midco transaction” stock deal in substance an asset deal and permits IRS to recover target corporation’s tax from its shareholders
Sellers, a husband and wife duo, founded in 1985, and formerly owned (along with other shareholders) Target, a television and radio company. Target owned six radio stations, and six tv stations, one tv station in Minnesota and five tv stations…
Court finds that buyer of lead paint manufacturer assumed seller’s liabilities for lead paint poisoning
This case involved a lawsuit filed by Plaintiffs, several individuals in a Wisconsin federal district court against Buyer for injuries allegedly incurred from ingesting white lead carbonate pigments contained in paint manufactured by Seller. Buyer purchased the assets of Seller…
Buyer of stock of title and escrow company can enforce noncompete and nonsolicitation provisions in target’s employment agreements
Target was a title and escrow company located in West Jordan, Utah (greater Salt Lake City area). Target’s Manager and Target’s COO/general counsel signed employment agreements with Target. Target’s Manager’s employment agreement, executed in August 2003, stated that she would…
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