We develop a categorization based on the event that triggers the formation of the spin-off
(opportunity or adverse developments) and the actor that creates the company (incumbent or employee) (see Figure 1).
Therefore, these papers suggest that sponsored spin-offs
should have positive, long-run abnormal stock returns following the spin-off
The changes in property rights play an important role in Shane's description of the academic spin-off
This new ruling policy present a major challenge to corporation contemplating spin-off
transactions In many cases, it will be clear that the requirements of section 355 are met, but each of the three factual issues on which the IRS refuses to rule--(i) adequacy of a company's business purpose; (ii) whether the transaction is a device for distribution of earnings and profits; and (iii) whether the spin-off
is part of a broader plan--is inherently uncertain.
Under section 355(e)(2)(B), a plan is presumed to exist where (1) one or more persons, (2) acquire directly or indirectly, (3) stock representing a 50-percent or greater interest in the distributing or any controlled corporation, (4) during the four-year period beginning two years before the spin-off
In Letter Ruling 9849013, the IRS allowed a key employee (and other employees) to obtain stock ownership in a spin-off
Emerging businesses may ultimately compete with one another, thus requiring a spin-off
in order for each to stand on its own.
Hathaway Corporation initially announced the intent to Spin-Off
OptiCon Systems, Inc.
P owns S and S owns S1), to position S1 for a spin-off
to P's shareholders, S would first have to spin S1 off to P.
OTCBB: MSEP) today announced the planned spin-off
of its subsidiary Scottsdale Diecast, Inc.
Sara Lee Corporation (NYSE:SLE) today announced that it has completed the tax-free spin-off
to its shareholders of Hanesbrands Inc.
Pink Sheets:HNST) today announced the planned spin-off
of MedBioWeb Corp.