In this issue of The Informed Board, we go behind all the talk about companies reincorporating in states other than Delaware. In our lead article and our podcast, we point out that few companies actually moved, and we explain...more
Matthew Massengill is a director and former chairman and CEO of Western Digital, which announced plans in October 2023 to spin off its flash memory businesses from the division that makes hard drives. He spoke with The...more
Welcome to Dorsey’s Energy Law: Month in Review. We provide this update to our clients to identify significant developments in the previous month. ...more
Artificial intelligence is not just about chatbots. Increasingly, it is used by government for enforcement, and boards need to prepare for that, just as they need to get ready for upcoming climate disclosure requirements....more
On April 4, 2024, the Delaware Supreme Court issued its opinion in In re Match Group, Inc. Derivative Litigation, clarifying that the heightened entire fairness standard of review applies to judicial review of any transaction...more
Takeaways - Tax law changes in the Build Back Better Act (BBBA) would limit the amount of value a company could extract in a spin-off by using a debt-for-debt exchange. Companies may be able to achieve most of the...more
Our Federal Tax Group considers ways to pass the inscrutable device prohibition in the Section 355 rules. - An “out” from device - How about a Morris Trust transaction? - Where does the cash come in?...more
Sometimes, it becomes necessary for a corporation to be divided, in which a shareholder or a group of shareholders would separate from the corporation and take with them a business division, unit or location. Parties...more
On September 21, 2017, the Internal Revenue Service (the “IRS”) issued Revenue Procedure 2017-52 (the “Rev. Proc.”), introducing an 18-month “pilot program” in respect of corporate “spin-off,” “split-up” and “split-off”...more
The IRS announced in May that it will resume issuing private letter rulings (PLRs) on two types of spinoff transactions — leveraged spinoffs and north-south spinoffs — that had been on its “no-rule” list since 2013. In a...more
The IRS continues to issue guidance in the much debated area of corporate spinoffs. A recently published ruling examined the federal income tax treatment of the two steps that comprise a so-called “north-south” transaction.”...more
The active trade or business rules are detailed and highly fact specific, and the IRS continues to refine its view on the qualification requirements. In order to separate two businesses housed in one corporation or in a...more
In July the Treasury proposed regulations reinterpreting Section 355 in cases where one of the corporations involved in the spinoff has more investment assets than the other or very little five-year active trade or business...more
On July 15, 2016, the U.S. Internal Revenue Service (IRS) and the Department of the Treasury (Treasury) published proposed regulations that would modify the device and active trade or business requirements for tax-free...more
The recent guidance under section 355 is a significant attempt by the IRS to clarify in a formal way what it historically has been able to do on a case-by-case basis through the private letter ruling process....more
The PATH Act exempts certain foreign pension funds from taxation under FIRPTA and significantly modifies the tax rules applicable to REITs. On December 18, 2015 (Enactment Date), US President Barack Obama signed the...more
Treasury and IRS announce that certain “cash rich” and REIT/RIC conversion spin-offs are under study and are added to the “no rule” list. On September 14, 2015, the United States Treasury Department (the Treasury) and...more
On September 14, 2015, the Internal Revenue Service (“IRS”) issued Notice 2015-59 (the “Notice”) and Revenue Procedure 2015-43 (the “Rev Proc”; together with the Notice, the “Spin-Off Guidance”). Under the Spin-Off Guidance,...more
In 2006, the media conglomerate News Corporation, referred to as Old News Corp, entered into a Settlement Agreement to settle stockholder litigation filed in Delaware in 2005. Subject to certain exceptions, the Settlement...more
In certain recent transactions, a corporation distributes a subsidiary corporation holding the distributing corporation’s real estate assets to the distributing corporation’s shareholders in a tax-free “spin-off.” Not only...more
On January 2, 2013, the Internal Revenue Service (the Service) released Rev. Proc. 2013-3, its annual list of areas in which it no longer will issue private letter rulings or determination letters (the 2013 No-Rule List). Of...more