For each of the following transactions, indicate the reorganization type (e.g., Type A, Type B, etc.). Assume all common stock is voting.
a. Anderson and Brown Corporations exchange their assets for all the single class of stock of newly created Computer Corporation. Following the exchange, Anderson and Brown liquidate. The transaction satisfies Michigan corporation law requirements.
b. Price Corporation (incorporated in Texas) exchanges all its assets for all the single class of stock in Price Corporation (incorporated in Delaware). Following the exchange, Price (Texas) liquidates.
c. All of Gates Corporation’s noncumulative, 10% preferred stock is exchanged for Gates common stock.
d. Hobbs Corporation exchanges its common stock for 90% of the outstanding common stock and 80% of the outstanding nonvoting preferred stock in Calvin Corporation. The remaining Calvin stock is held by about 30 individual investors.
e. Scale Corporation transfers the assets of its two operating divisions to Major and Minor Corporations in exchange for all of each corporation’s single class of stock. Scale then distributes the Major and Minor stock pursuant to the liquidation of Scale.
f. Tobias Corporation has $3 million of assets and $1 million of liabilities. Andrew Corporation exchanges $2 million of its voting common stock for all of Tobias’ assets and liabilities. Tobias liquidates, and its shareholders end up with 11% of the Andrew stock.
g. How would your answer to Part f change (if at all) if Tobias’ balance sheet indicates that liabilities constitute 90% of the corporation’s capital structure and common stock, the remaining 10%?