I previously blogged the Tax Court’s decision in Tribune Co. v. Commissioner, 125 T.C. No. 8 (9/27/05), which held that the divestiture of the Matthew Bender Publishing Co., and its 50% interest in Shepard’s-McGraw Hill, was not a tax-free reorganization and instead was a taxable sale to Reed Elsevier for $1.375 billion. (See here for helpful charts of the transactions in the case.) The Tribune has announced that the Seventh Circuit has agreed to defer tomorrow’s scheduled oral argument for ninety days to give the Government time to respond to the Tribune’s $350 million refund settlement offer:
Under the proposed settlement, Tribune will receive refunds of approximately $350 million in federal and state income taxes and interest resulting from payments previously made for both the Matthew Bender transaction and a similar transaction completed by Times Mirror. …
A filing with the Seventh Circuit U.S. Court of Appeals said that while it is not certain that the settlement will be approved, counsel for both parties are optimistic that the case can be resolved without the intervention of the Court. The Court has agreed to defer the June 5 oral argument for 90 days to allow for governmental review and approval of the offer.
Press coverage:
Update: Linda Beale has more here.
