Sears Holdings Corp. (fka SHLDQ)

[Mehdi]

Here is something very interesting:
https://lanierford.com/images/NewsPDFs/bankruptcy_special_topics.pdf

Look at pages 23 through 28. In summary, tax attributes do not transfer from debtor to acquiring company unless it is a « tax-deferred « (also called tax-free) transaction under 368(a)(1)(G) exemption. One of the requirements of that exemption is continuity of proprietary interests measured by amount of stock received by transferor’s creditors AND shareholders as a percentage of total consideration. Typically if 40% or more of consideration is transferor’s stock, requirement is met. BIM!

Also this:
http://www.woodllp.com/Publications/Articles/pdf/Continuity_of_Interest.pdf

« The continuity of interest requirement is fundamental. Whatever other statutory tests may be required, to qualify for tax-free reorganization treatment, a transaction must also satisfy this judicially created requirement. The continuity of interest rule ensures that the shareholders of the target must maintain a continuing interest in the acquiring company after closing by receiving at least 40 percent of their aggregate consideration in the form of stock in the acquiring company. »