By: David J. Herzig
On Saturday, I posted about a merger gone bad that I thought only a couple partnership tax people would find interesting.
Essentially, a $38 Billion merger was torpedoed because neither, Latham, Morgan Lewis nor Gibson Dunn could conclude that the merger qualified as tax-free under 721. The fight between the the tax attorneys was whether the transaction was truly a partnership formation eligible under 721 with a 731 distribution or if the transaction was a disguised sale under the anti-Otey regulations (Treas. Reg. § 1.707-3). Chancery Court Vice Chancellor Sam Glasscock [http://courts.delaware.gov/opinions/list.aspx?ag=court%20of%20chancery%5] ruled, since there was enough uncertainty that the proposed transaction could not be eligible for 721 treatment under a should opinion standard, Energy Transfer Equity (ETE) could back out of the deal. Williams stated that they will appeal.
I honestly thought no one would care about the post. But, it looks like people care, so I will try to keep up with the case and post updates here. I actually have some other thoughts on the transaction that I will post as they become more developed.
To some of the updates, here is a link to a letter to the shareholders of the Williams Continue reading “Updates on the Williams/ETE Merger”