Sullivan & Cromwell Discusses Corporate Inversion Transactions

On January 13, 2017, the Internal Revenue Service (the “IRS”) and the Treasury Department (the “Treasury”) published new final and temporary regulations (the “New Regulations”) and issued a notice of proposed rulemaking by cross-reference to the temporary regulations that address inversion transactions.  The New Regulations generally finalize the previous temporary and proposed regulations while making a few technical changes.  Most notably, the New Regulations:

  • expand the application of the “associated obligations” rule and exclude intercompany obligations from “nonqualified property” that gives rise to disqualified stock,
  • retain the distinction between stock and asset reorganizations,
  • leave undisturbed pre-IPO buyout transactions and
  • modify

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