Federal Register: December 24, 2008 (Volume 73, Number 248)
DOCID: fr24de08-17 FR Doc E8-30716
DEPARTMENT OF THE TREASURY
Internal Revenue Service
CFR Citation: 26 CFR Part 1
RIN ID: RIN 1545-BC88
TD ID: [TD 9434]
NOTICE: RULES
DOCID: fr24de08-17
DOCUMENT ACTION: Correcting amendment.
SUBJECT CATEGORY:
Creditor Continuity of Interest; Correction
DATES: Effective Date: This correction is effective December 24, 2008 and is applicable on December 12, 2008.
DOCUMENT SUMMARY:
This document contains a correction to final regulations (TD 9434) that were published in the Federal Register on Friday, December 12, 2008 (73 FR75566) providing guidance regarding when and to what extent creditors of a corporation will be treated as proprietors of the corporation in determining whether continuity of interest (``COI'') is preserved in a potential reorganization. These final regulations are necessary to provide clarity to parties engaging in reorganizations of insolvent corporations, both inside and outside of bankruptcy. These final regulations affect corporations, their creditors, and their shareholders.
SUMMARY:
Creditor Continuity of Interest; Correction,
SUPPLEMENTAL INFORMATION
Background
The final regulations that are the subject of this document are under section 368 of the Internal Revenue Code.
Need for Correction
As published, final regulations (TD 9434) contains an error that may prove to be misleading and is in need of clarification. List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements. Correction of Publication
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendment:
PART 1INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read, in part, as follows:
Authority: 26 U.S.C. 7805 * * *.
Par. 2. Section 1.3681(e)(6)(ii)(A) is amended by revising the last sentence as follows:
Sec. 1.3681 Purpose and scope of exception to reorganization exchanges.
(e) * * *
(6) * * *
(ii) * * *
(A) * * * When only one class (or one set of equal classes) of
creditors receives issuing corporation stock in exchange for a
creditor's proprietary interest in the target corporation, such stock
will be counted for measuring continuity of interest provided that the
stock issued by the issuing corporation is not de minimis in relation
to the total consideration received by the insolvent target corporation, its shareholders, and its creditors.
* * * * *
LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).
[FR Doc. E830716 Filed 122308; 8:45 am]
BILLING CODE 483001P
FOR FURTHER INFORMATION CONTACT
Jean Brenner (202) 622-7790, Douglas Bates (202) 6227550, or Bruce Decker (202) 6227550 (not tollfree numbers).