Wednesday, October 19, 2016 4:49:20 PM
Read the first part carefully...I think this was released in reference to Lehman, not WMI.
IRS released PLR 2012280233 concerning the federal income tax consequences of the liquidation of a consolidated group (“Taxpayer Group”). Taxpayer Group had a consolidated NOL and subsequently, Taxpayer and several of its affiliates (“Debt- ors”) filed for Chapter 11 bankruptcy. Under the final bankrupt- cy plan (“Plan”), a plan trust was created and all of Taxpayer’s stock was cancelled. The plan trust provided for the issuance of one share to be issued and held for the benefit of each former shareholder consistent with their former entitlements. After the Plan’s effective date, Taxpayer, as the plan administrator, was to wind down and liquidate Debtor assets. Though unlikely, the Plan preserved the Taxpayer’s shareholders’ right to receive a distribution in proportion to their previous stockholdings. The Debtors will ultimately be dissolved.
The IRS ruled that, under Section 382(g), there was no owner shift where the stock held in the plan trust stock replaced Taxpayer’s stock. Further, claims retained and interests received by the Debtors’ creditors are not “stock” for purposes of Section 382.4
There was no "one share" created under WMI.
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