The Lowdown On Top Up Options

Law360, New York (January 19, 2012, 5:59 PM EST) -- This article considers the intersection of the corporate law tool known as the “top up option” with the Internal Revenue Code’s section 338, which permits an election that can be favorable after certain corporate stock purchases.

The Top Up Option Under Delaware Law

Two-step taxable stock acquisitions by tender offer and follow-on squeeze out merger frequently employ what are called top up options. These are best explained by the Delaware Chancery Court opinion that approved their use, Olson v. ev3 Inc., 2011 Del. Ch. (Feb. 21,...
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