Court Opinion

ID: 4479761
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:50.623892+00
Date Added: 2024-06-11T15:03:33.041143
License: Public Domain

Murdock, J., dissenting: I am unable to find from the facts in this case that the purchase by Gremoco of its preferred stock from the petitioner was “one of a series of distributions made by a corporation in complete cancellation or redemption of all of its stock in accordance with a bona fide plan of liquidation and under which the transfer of the property under the liquidation is to be completed within a time specified in the plan.” This provision of the statute contemplates a plan of the corporation as such for complete liquidation within a specified time and not something in the minds of the individual stockholders which they have not made the plan of the corporation and which is not definite and complete. Here the corporation never took any action until November 20, 1939, which was after all of this preferred stock had been acquired. Prior to that time there was nothing more than some more or less indefinite hopes, expectations, or intentions in the minds of some of the stockholders and officers. The evidence shows that these individuals were never able to make any definite plan for complete liquidation until all of the preferred stock' had been acquired. Jordan’s letter of October 30, 1939, is typical. It said in part: “This leaves him [the petitioner] with 2,000 shares. We will make further purchases as we are able to in accordance with your wishes.” Future action depended upon what the corporation was able to do and there was no definite plan for complete liquidation within any specified time. Furthermore, if there was any plan, then 3,256 of the petitioner’s shares were within that plan and not just 2,000, as is held in the majority opinion. Disney, J., agrees with this dissent.