Court Opinion

ID: 4481324
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:50.063123+00
Date Added: 2024-06-11T15:04:12.381549
License: Public Domain

Simpson, J., dissenting: I agree with Judge Tietjens’ conclusion, but as the author of the opinion in Zilkha & Sons, Inc., 52 T.C. 607 (1969), I wish to add my comments. Based on the facts of this case, I would conclude that the securities acquired by the sellers in substance more resembled a debt than stock. In selling the businesses, the sellers were willing to agree to defer part of the purchase price. However, they wanted to receive earnings on the deferred part of the purchase price, and they wanted to receive full payment within a relatively short time — 4 years. As a result of the agreement made with the shareholders of the purchaser, the sellers were assured that they would receive the desired earnings and the desired repayment. They did not assume the risks of a shareholder. Compare Zilkha & Sons, Inc., supra. Tietjens, Dawson, and Hoyt, JJ., agree with this dissent.