DD Support Board and Research Team

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The IRS has specific treatments for NOLs, especially change of ownership and Continuity of Business.

Here are some good links to read, including IRC 338 and 382.

https://www.law.cornell.edu/uscode/text/26/382

https://www.law.cornell.edu/uscode/text/26/338

http://www.willamette.com/insights_journal/11/winter_2011_12.pdf

I don't know who is the purchaser, however, Why would GameStop or RedBox tax attorneys not think Blockbuster's NOLs are valuable?

Keep in mind, Yahoo got the shaft from the IRS when they refused to opine on spinning off Alibaba.

Yahoo would have left their behind out in the air taking a chance with the IRS subsequent to the transaction with no recourse or to unwind the transaction.

Yahoo outsmarted the IRS and spun it self out. Creative. How many tens of millions did they pay to come up with Plan B?

I would hate to spend tens of millions to defend a decision after purchasing a $242 million NOL and lose in court.

It is a large risk factor. The IRS can drag it out, a small company cannot. They will be out of business before the first revenue is collected after the merger.

And don't forget about IRC 1031 might come into play.

It has been quite some time since I have worked on an M&A that included an NOL.