Rufous Corporation just lost a $1.5 million product liability lawsuit. Its assets currently are worth $2 million and its outstanding liabilities amount to $800,000 without considering the lawsuit loss. As a result of the lawsuit, Rufous's future revenue stream appears to be substantially impaired. Rufous's president, Hunter Green, asks your advice regarding the possibilities of restructuring the corporation. Write a memo for the tax research file explaining Hunter's choices in restructuring Rufous.
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