Bausch & Lomb Optical Co. v. Commissioner
United States Court of Appeals for the Second Circuit
267 F.2d 75 (1959)
- Written by Kelli Lanski, JD
Facts
Bausch & Lomb Optical Co. (B&L) (plaintiff) made and sold ophthalmic products. B&L wanted to combine itself with Riggs Optical Company (Riggs), a partially owned subsidiary in which B&L owned 9,923.25 shares of stock. To do this, B&L put together a plan, which it documented in internal correspondence, and initiated two transactions. First, B&L exchanged shares of its unissued voting stock for all of Riggs’s assets. Riggs’s employees also received shares of B&L’s stock. Second, Riggs dissolved and distributed its only asset, B&L stock, to its shareholders. B&L thus received many of its own shares back, with the remainder going to Riggs’s minority shareholders. B&L took the position that its acquisition of Riggs’s assets was a tax-free reorganization under § 368(a)(1)(C) of the Internal Revenue Code, claiming that it had acquired Riggs’s assets solely for B&L’s voting stock. However, viewing both transactions together, the commissioner of the Internal Revenue Service (commissioner) (defendant) decided that B&L had received Riggs’s assets partly in exchange for Riggs’s stock and partly for B&L’s stock. Thus, the gain B&L realized upon Riggs liquidating its assets was subject to tax. B&L sued, and the United States Tax Court agreed with the commissioner. B&L appealed.
Rule of Law
Issue
Holding and Reasoning (Medina, J.)
What to do next…
Here's why 966,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 47,500 briefs, keyed to 1,007 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.
- AI-generated podcast version of every brief — listen on the go, between classes, or whenever reading isn’t an option. New
Understand your casebook readings in seconds
Use our case briefs to comprehend your casebook readings faster, supplement your notes and outlines, and outshine your peers in class.
Get instant access to over 47,500+ expert-written case briefs in a searchable database keyed to 1,007 law school casebooks.
