Court Opinion

ID: 4476448
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:12:01.476353+00
Date Added: 2024-06-11T15:08:38.146504
License: Public Domain

JOHNSON, J., dissenting: I can not agree with the majority holding that the accounts payable had no value when they were exchanged for the preferred stock of the reorganized corporation. Both the creditors and the debtor corporation impliedly acknowledged that the debts liad some value when the creditors exchanged their debts for preferred stock. Since the accounts receivable in the hands of petitioner’s creditors were property and since the creditors exchanged the property for stock, such an exchange is property paid in for stock and is therefore within section 718 (a) of the Code. Prosperity Co. v. Commissioner, 201 F. 2d 499; affirming 17 T. C. 171; Crean Brothers, Inc. v. Commissioner, 195 F. 2d 257; reversing 15 T. C. 889; Akeley Camera & Instrument Corp., 18 T. C. 1045. I therefore respectfully dissent. Arundeee and LeMiRe, JJ., agree with this dissent.