reorganization
Definitions from Case Law · United States Supreme Court
Definitions from Case Law
From 293 U.S. 465 - Gregory v. Helvering · 1935Most cited · 4,709 citing opinions
corporate, tax
When subdivision (B) speaks of a transfer of assets by one corporation to another, it means a transfer made 'in pursuance of a plan of reorganization' of corporate business; and not a transfer of assets by one corporation to another in pursuance of a plan having no relation to the business of either.
How the Supreme Court has restated “reorganization”
Each Supreme Court definition of “reorganization,” sized by how often later courts cited it. “Change” is measured by wording overlap with earlier definitions — a rough signal, not a semantic judgment.
How often courts cite the cases defining “reorganization”
Court decisions citing the 5 opinions that defined “reorganization” — 6,371 in all, by decade. Counts are citations to the defining cases as a whole, not verified uses of the term. The dip in the most recent years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the latest years.
All 5 definitions, chronological · 1933–1942
- ORIGINAL
The words within the parenthesis may not be disregarded. They expand the meaning of 'merger' or 'consolidation' so as to include some things which partake of the nature of a merger or consolidation but are beyond the ordinary and commonly accepted meaning of those words—so as to embrace circumstances difficult to delimit but which in strictness cannot be designated as either merger or consolidation. But the mere purchase for money of the assets of one company by another is beyond the evident purpose of the provision, and has no real semblance to a merger or consolidation.
The words within the parenthesis may not be disregarded. They expand the meaning of 'merger' or 'consolidation' so as to include some things which partake of the nature of a merger or consolidation but are beyond the ordinary and commonly accepted meaning of those words—so as to embrace circumstances difficult to delimit but which in strictness cannot be designated as either merger or consolidation. But the mere purchase for money of the assets of one company by another is beyond the evident purpose of the provision, and has no real semblance to a merger or consolidation. Certainly, we think that to be within the exemption the seller must acquire an interest in the affairs of the purchasing company more definite than that incident to ownership of its short-term purchase-money notes. And we now add that this interest must be definite and material; it must represent a substantial part of the value of the thing transferred. This much is necessary in order that the result accomplished may genuinely partake of the nature of merger or consolidation.
Where the consideration is wholly in the transferee's bonds, or part cash and part such bonds, we think it cannot be said that the transferor retains any proprietary interest in the enterprise. On the contrary, he becomes a creditor of the transferee; and we do not think that the fact referred to by the Circuit Court of Appeals, that the bonds were secured solely by the assets transferred and that, upon default, the bondholder would retake only the property sold, changes his status from that of a creditor to one having a proprietary stake, within the purview of the statute.
The 'reorganization' provisions in question cover only inter-corporate transactions.
inter-corporate requirement