73 FR 248 pg. 78969 - Creditor Continuity of Interest; Correction
Type: RULEVolume: 73Number: 248Page: 78969
Docket number: [TD 9434]
FR document: [FR Doc. E8-30716 Filed 12-23-08; 8:45 am]
Agency: Treasury Department
Sub Agency: Internal Revenue Service
Official PDF Version: PDF Version
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9434]
RIN 1545-BC88
Creditor Continuity of Interest; Correction
AGENCY:
Internal Revenue Service (IRS), Treasury.
ACTION:
Correcting amendment.
SUMMARY:
This document contains a correction to final regulations (TD 9434) that werepublished in the Federal Register on Friday, December 12, 2008 (73 FR75566) providing guidance regarding when and to what extent creditors of a corporation willbe treated as proprietors of the corporation in determining whether continuity of interest("COI") is preserved in a potential reorganization. These final regulations are necessary toprovide clarity to parties engaging in reorganizations of insolvent corporations, both inside andoutside of bankruptcy. These final regulations affect corporations, their creditors, and theirshareholders.
DATES:
Effective Date: This correction is effective December 24, 2008 and is applicable on December 12, 2008.
FOR FURTHER INFORMATION CONTACT:
Jean Brenner (202) 622-7790, Douglas Bates(202) 622-7550, or Bruce Decker (202) 622-7550 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the subject of this document are under section 368 ofthe Internal Revenue Code.
Need for Correction
As published, final regulations (TD 9434) contains an error that may prove to bemisleading 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 1-INCOME 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 1.368-1(e)(6)(ii)(A) is amended by revising the lastsentence as follows:
§ 1.368-1 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 issuedby the issuing corporation is not de minimis in relation to the total consideration received bythe 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. E8-30716 Filed 12-23-08; 8:45 am]
BILLING CODE 4830-01-P