The opinion
Sterrett, J., dissenting: As the majority notes respondent has accepted the view of the Courts of Appeals for the Fifth and Ninth Circuits and the Court of Claims 1 that the combination of two or more operating companies may qualify as an "F” reorganization. The Sixth Circuit 2 has also so held. While I am sympathetic with our earlier opinions to the contrary, I see no useful purpose to be served by putting our finger in the dike after the lowlands are flooded. There are sufficient uncertainties in the tax field to maintain our interest without our refusing to let one issue be resolved.
Accepting this premise and after comparing the shifts in proprietary interest with those in Aetna Casualty & Surety Co. v. United States, F.2d (2d Cir. 1976), I am compelled to the conclusion that we are dealing here with a qualifying "F” reorganization within the meaning of section 381. The holders of the proprietary interest remain identical with the only shift being each’s degree of minority interest. It can fairly be said that the old shareholders continue to have substantially the same measure of control and proprietary interest in the transferee corporation as they had in the transferor. I would hold for petitioners.
Davant v. Commissioner, 366 F.2d 874 (5th Cir. 1966), cert. denied 386 U.S. 1022 (1967); Estate of Stauffer v. Commissioner, 403 F.2d 611 (9th Cir. 1968); Associated Machine v. Commissioner, 403 F.2d 622 (9th Cir. 1968); Movielab, Inc. v. United States, 494 F.2d 693 (Ct. Cl. 1974).
Performance Systems, Inc. v. United States, 382 F. Supp. 525 (M.D. Tenn. 1973), affd. per curiam 501 F.2d 1338 (6th Cir. 1974).