Acc 433 Reorganizations Handout

Reorganizations:

A - Statutory Merger

B - Stock for Stock

C - Stock for Assets

D - Devisive (Split up)

E - Recapitalization

F - Change of Name

G - Bankruptcy

Reorganizations Require

Plan

Business Purpose

Continue The Business

Continuity of Interest (ownership)

A Reorganization

Merger under state law

Need to give 50% stock for continuity of Interest

B Reorganization

Stock for Stock

For Control (80%)

Can creep?????

C Reorganization

Stock for Assets

  Can use some cash (unless liabilities assumed)

Substantially all the assets =

  90% fair market value of net assets

  70% fair market value of gross assets

D Reorganization

Devisive - split up the company

  Can be pro-rata or non pro-rata

  5 year rule -

Active Business Requirement

E Reorganization

Recapitalization

F Reorganization

Change of Name

Change of Place

Change of State

G Reorganization

Bankruptcy

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