Court Opinion

ID: 4480669
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:27.871534+00
Date Added: 2024-06-11T08:48:28.471350
License: Public Domain

Baum:, J., dissenting: I cannot agree that the merger of Old Casco into New Casco was only “in form a reorganization” and that New Casco was “merely a meaningless detour.” New Casco was not a corporation with transitory life; it was not a mere stopping place en route to an ultimate destination; it was itself the end product of the transactions before us, and indeed is the petitioner herein. Old Casco was a corporation existing for a number of years and the deficiencies in controversy were determined with respect to its tax years, not those of New Casco. Both Old Casco and New Casco were separate, distinct viable corporations. One was merged into the other in order to squeeze out a 9-percent minority stockholder interest. Such merger was a corporate reorganization, and section 381(b)(3) forbids the carryback of a postreorganization net loss to a taxable year of the predecessor corporation unless the transaction is a reorganization “described in subparagraph (F) of section 368 (a) (1).” I can see no escape from the necessity of determining whether this reorganization fell within (F). The question whether the elimination of a 9-percent adverse minority interest may be ignored or regarded as de minimis in order to satisfy the requirement of (F) that there be a “mere change in identity, form, or place of organization” is a teasing and difficult one. And I can understand why one might wish to avoid it. But it cannot be sidestepped here and must be faced. In failing to address itself to the issue thus presented and argued by the parties, I think the majority erred. I express no opinion on the question itself at this time until it is considered by the Court. Witi-iney, AtkiNS, Scott, and Featherston, JJ., agree with this dissenting opinion.