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Discounts on Letter Stock Do Not Appear to Be a Good Base on Which To Estimate Discounts for Lack of Marketability on Closely Held Stocks
By RICHARD D. JOHNSON and GEORGE A. RACETTE

The authors analyze a sample of 86 placements of restricted stock and conclude that there is no support for the contention that discounted placement prices on restricted securities reflect only impaired marketability on those securities. Richard D. Johnson is an associate professor in the business administration department at California Polytechnic State University in San Luis Obispo, California. George A. Racette is an associate professor in the department of finance at the University of Oregon in Eugene, Oregon.

In an article which appeared in the January 1981 TAXEs-The Tax Magazine, George S. Arneson discusses factors that have an impact on discounts for lack of marketability.' Underlying his analysis is the assumption that discounts on letter stock placements provide a base or starting point from which to assess nonmarketability discounts on closely held stocks. This article addresses the question of whether the difference between the issue price of restricted common stock and the price of a firm's freely traded, but otherwise identical, common stock is evidence of a discount for lack of marketability, and is, therefore, an appropriate base to establish nonmarketability discounts. This article analyzes a sample of 86 placements of restricted ("letter") stock. As a first step in this analysis, it should be recognized that the price of a privately placed security may differ from that of its freely traded counterpart for reasons other than differences in marketability. In particular, an information effect may exist if new information unavailable to investors in the market is released to purchasers of restricted securities. In addition, a dilution or issue cost effect may exist. While information and dilution may influence prices of both letter stock and

@ 1981, RichardD. Johnson and George A. Racette

'George S. Arneson, "Nonmarketability Discounts Should Exceed Fifty Percent," 59 TAxEs-The Tax Magazine 25 (January 1981). August, 1981

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freely traded stock, the letter will adjust only when knowledge of the information released and the extent of dilution becomes available to the market. The results of this analysis are consistent with the existence of significant information and dilution effects. However, somewhat surprisingly and contrary to the views of many researchers and practitioners, the results are not consistent with the existence of a significant marketability effect. The analysis in this article does not conclude that impaired marketability can have no effect on value; it does indicate, however, that the traditional comparison of the issue price of letter stock with the price of the same firm's freely traded stock should not be used to establish evidence of the magnitude of any such discount.

I. Valuing Closely Held Stock and Discounts for Impaired Marketability

A wide range of circumstances-including

of marketability allowed by the courts and concludes that discounts allowed by the courts are inadequate. In a later study, Maher finds discounts that average 35 percent and concludes that this figure should be applied as a discount for lack of marketability. 4 The latest article by Arneson suggests that the discount of 35 percent reported by Maher should be used as a base for establishing a nonmarketability discount for closely held shares but that this discount should be adjusted for quantitative and qualitative factors in 5 addition to the letter stock discount. These factors include risk, cost of flotation and timing effects. Both studies by Maher and Moroney show a large dispersion in reported discounts. Such 'a wide range of discounts is puzzling in the discount if due solely to lack of marketability. Why should the discount for lack of marketability be 2 percent in one case and 90 percent in another? A satisfactory answer to this question has yet to appear. In the following section, an alternative explanation of observed discounts, which includes information and dilution effects as well as a marketability effect, has been provided. Data analysis follows an explanation of each effect.

estate, gift and income taxation, divorce, damages, mergers and bankruptcy may dictate the necessity of business valuation. In a vast number of these instances, the enterprise to be valued has securities which are traded infrequently, if at all. Under these circumstances one or more experts may be asked to value the enterprise. Experts recognize that shareholders of a closely held firm are unlikely to be able to sell their shares as easily as they could sell the stock of a large actively traded firm. As a consequence, a valuation will often proceed in two steps. First, the shares will be valued as if readily bought and sold using available data from comparable firms which are actively traded. Second, the value
of the firm established in the first phase will be

II. Factors Potentially Affecting the Price of Privately Placed Stock

A public firm that sells stock in a private placement and thereby avoids Securities and Exchange Commission registration must sell to a limited number of sophisticated investors who intend to hold the stock as an investment. Purchasers of the stock sign a letter stating that they intend to hold the stock as an investment, an action giving rise to the term "letter stock." 'See Id.; J. Michael Maher, "Discounts for Lack of Marketability for Closely Held Business Interests," 54
TAXEs-The Tax Magazine 562 (September 1976); Robert E. Moroney, "Most Courts Overvalue Closely Held Stocks," 51 TAXEs-The Tax Magazine 144 (March 1973). 'See Maher and Moroney, op. cit. It is interesting to note that a prior study reported discounts on private placement of equity which were substantially smaller. A portion of the Institutional Investor Study analyzed placements purchased by a broader group of institutional investors. The study shows average discounts that range from 15.3 percent in 1966 to 27.9 percent for placements acquired in the first half of 1969. See U. S. Securities and Exchange Commission, Institutional Investor Study Report, 92nd Congress, 1st Session, House Document no. 92-64, Part 5, U. S. Government Printing Office, Washington, D. C., 1971. 'See Maher, op. cit., p. 571. 'See Arneson, op. cit., p. 26.

adjusted downward to reflect the degree of impaired marketability. Justification for the latter step lies in the presumption that securities with impaired or restricted marketability are worth less than otherwise identical securities which can be freely traded. An important task of the expert, then, is to assess the appropriate discount for impaired marketability. Several authors suggest that discounts on letter stock placements of firms which have freely traded stock be used as proxies for a 2 discount due to impaired marketability. Studies by Maher and Moroney report average discounts that range between 33 percent and 40 percent.' Moroney compares discounts on letter stock placements to discounts for lack
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Resale restrictions are imposed upon the purchasers of letter stock. The view that a discount on such stock stems from impaired marketability is based upon consideration of these restrictions. Once acquired, letter 'stock may be resold in one of three ways. 6 First, if the issuing firm registers the letter stock, it can be sold under the registration. Second, if the letter stock has been beneficially owned for a period of time sufficient to satisfy investment intent, it may be resold on the public market free of further restrictions. Third, the letter -stock may be sold to a third party in a subsequent private placement. If sold in this manner, the stock remains restricted and the new purchaser is subject to the same resale restrictions that applied to the original purchaser. If we compare the resale opportunities of an investor in letter stock with those of an investor in similar freely traded stock, it is clear that the owner of the freely traded stock is likely to have flexibility in liquidating his holdings. Owners of stock traded in active markets can liquidate their holdings at any time following the purchase without incurring large search costs, waiting for days, weeks or months to find a buyer or depressing the price unduly. The owners of letter stock may resell in the public market only after the stock has been held for a period of time sufficiently long to satisfy investment intent If an investor desires -to liquidate prior to satisfying the minimum holding period requirement, he can do so under either a subsequent registration or placement. The time and costs involved in these types of sales are likely to be greater than the time and costs involved in selling freely traded stock. While it is clear that the owner of letter stock does not have the same flexibility in liquidation of his stock, the critical question is whether resale restrictions are the only factors that affect the price at which letter stock is sold. If they are, then the price differential between a firm's freely traded stock and otherwise identical restricted securities may be an adequate proxy for marketability discounts, even though the reason for the vast difference in magnitude remains puzzling. If, however, there are other significant economic factors which affect that price differential, using that differential as a proxy -for the valuation impact of impaired marketability is unwarranted. Information and Issue Costs Effects.-Consider the setting in which a private placement ,occurs. First, a firm undertaking a private place576

mtent secures funds that may allow additional investment or change in the structure of liabilities. In that process, any disclosures made by the issuing firm concerning its need for capital and intended use of the funds may provide information to the purchasers which leads to a reassessment of share value. That information is not necessarily available to investors in the market for freely traded stock. Second, when a firm secures additional capital, its owners bear any issue costs. While these costs are directly observable in a public offering, they would appear only implictly in the issue price of a private placement and are not directly observable. If significant information is released to private purchasers without being leaked to the market and if issue costs are large, a substantial differential between market price and placement will exist in the short run even if the marketability effect is negligible. When a firm sells additional stock in a registered public offering, the process is structured and formal. The firm must announce details associated with the offering and disclose results from current operations as well as intended use of funds in the prospectus that must accompany the offering. After the Securities and Exchange Commission approves the adequacy of disclosure, information in the prospectus is publicly released in advance of the actual sale. Investigations of registered public -offerings indicate that such offerings appear to be a source of information to market participants. Following announcement of the sale, permanent adjustments in share price are found -as the market reacts to information of the sale.8 If information is also released in the course of private placement, one may expect similar adjustments in share prices. However, a key
'The discussion of resale restrictions presented here is purposely brief. For our purposes, we need to show that resale opportunities may be constrained and that the purchaser may not be easily able to resell the stock once acquired. For a detailed analysis of resale restrictions, see Richard D. Johnson, "An Analysis of Investor Returns Surrounding Private Placement of Common Stock," a dissertation presented to the Department of Finance at the University of Oregon, June 1980. 'Under Rule 144-Sales, a limitation is placed on the amount of stock which can be liquidated in any sixmonth period following the minimum holding period. "Several studies have examined pricing surrounding registered offerings. See Myron S. Scholes, "The Market for Securities, Substitution versus Price Pressure and the Effects of Information on Share Prices," The Journal of Business, April 1972; Hans R. Stoll, "The Pricing of Underwritten Offerings of Listed Common Stocks and

the Compensation of Underwriters," Journal of Economics and Business, Winter 1976; and A. C. Hess and
P. A. Frost, "Tests for Price Effects of New Issues,"

unpublished working paper, September 1979.

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difference between public and private placement lies in the extent of information dissemination. In a private placement only the parties to the transaction are immediately aware of any information disclosures. Any -difference between the prices of an issuer's freely traded and privately placed stock should reflect the value of such information as well as any effect of impaired marketability. Clearly, information released in private placement may be "good" or "bad," so any price differential may be positive or negative. But the observation that placements are usually sold at discounts implies that either other negative effects swamp any positive information or predominantly negative information is disclosed to purchasers of private placements. Managers of firms who desire to sell equity and who would have to disclose negative information about the firm in a registered offering, may have incentives to secure funds via a placement rather than through a public offering if they can avoid or delay disclosing that information to the general investing public.9 The arguments in the previous paragraphs ignore a potentially important consideration other than possible costs associated with impaired marketability. They also ignore transaction costs assodated with raising new capital. Evidence suggests that raising new capital is expensive and that it is particularly expensive when small amounts of equity are involved. 10 In studies of public 'offerings which are underwritten by investment bankers, those costs are explicit. An investment banker will pay the firm one price for the shares and then sell their shares at a higher price to the public. The difference is the issue cost." But in a private placement there are no explicit issue costs (though in some cases there may be a finder's fee). That does not imply, however, that such costs are zero. Negotiating a private placement may take considerable time and a potential purchaser is unlikely to enter into such a negotiation without receiving some form of compensation. While that compensation may take many forms, in this instance it may mean that purchasers can obtain the shares at a discounted price. Information, issue costs and marketability effects all lead to predictions of discounted purchase prices for letter stock. However, information and issue costs effects imply additional predictions not suggested by a pure marketability effect. They lead to predictions of a decline in the price August, 1981

of freely traded stock following a placement. Further, 'if purchasers of placements are able to form an unbiased assessment of the valuation impact of in-formation released to them in the placement process, the size of the discount should be positively related to the magnitude of the postplacement price decline in the freely traded stock. That is, the worse the news released at placement, the larger the discount and the greater the decline in the free market price when the news reaches the market.

Ill. Analysis of Return Following a Private Placement

In this section, the returns on public stock are examined to determine if such returns are consistent with predictions implied by both infor-mation and issue costs effects. A description of the sample and observed discounts on placements is followed by an analysis of the returns for the 86 placements in the sample. Next, the relationship between discounts and returns on publicly traded stock following the placement is examined. Finally, the returns earned by investment companies which purchased private placements are reviewed. Sample Description.-Our sample is composed of restricted securities purchased by registered investment companies between 1967 and 1973. Such purchases were identified from a summary of N1-R reports which was provided by the Securities and Exchange Commission. From the N1-R reports, placements of common stock which had freely traded stock at the time of the placement were selected.12 Since the empirical predictions of the previous section require examination
'Management may believe that a quick infusion of funds could mitigate the impact of the negative information. It is also possible that slightly different information may be disclosed in the placement than would have to be disclosed in a public offering. Management could also be avoiding or delaying the disclosure of negative information to protect themselves. For a thorough development of this motivation, see Chapter III, Richard D. Johnson, op. cit. 10See U. S. Securities and Exchange Commission, "Costs of Floatation of Registered Issues: 1971-1972," U. S. Government Printing Office, Washington, D. C., 1974. 'The offering may be on a "best efforts" basis, in which case there is a stated commission on the sale. In either a best efforts or underwritten offering it is possible to identify the issue costs. 1 Only pure common stock placements were included in the sample. Unit placements involving more than one type of security were eliminated since it is impossible to assess discounts using only a portion of the placement. The discount on the stock may be related to terms on other securities and analysis of the discount on the stock would be incomplete.

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of prices of publicly traded stock following the placement, only those stocks for which such prices were available were included in the sample.'" The two-year period was selected in accordance with the minimum holding period requirement for public sale of letter stock. From the N1-R summary report, all placements which appeared to be pure common stock placements were identified and the annual reports

from purchasing investment companies were requested. Annual reports were necessary to verify purchase date and terms. Seventy-five investment companies sent reports, and 86 placements met all criteria for inclusion in the sample. Discounts on sample placements were calculated as of the date of acquisition. The frequency distribution for discounts is displayed in Table 1.

Table 1: Frequency Distribution of Discounts on Acquisition Date Discount 0-10% 10.1-20% 20.1-30% 30.1-40% 40.1-50% Number of Observations
15

Percentage of Observations 17.4 14.0 12.8 22.1 9.3 9.3 8.1 3.5 2.3 1.2 100.0

Cumulative Percentage 17.4 31.4 44.2 66.3 75.6 84.9 93.0 96.5 98.8 100.0

50.1-60% 60.1-70% 70.1-80% 80.1-90%

90.1-100% Totals Mean S. Error Range

12 11 19 8 8 7 3 2 1 86 34.01% 2.51% 0 to 90.24%

The mean discount for the sample was 34 percent, with a range from 0 to 90.24 percent. Discounts as of acquisition date were used since only acquisition discounts were available for the entire sample. 4 Return Analysis.-To determine if price declines are observed on the publicly traded stock, we examine cumulative returns for the two-year period following placement. Each monthly return is constructed by subtracting the price at the beginning of the month from the price at the end of the month and dividing by the price at the beginning of the month.' 5 Cumulative returns over any particular number of months following placement are also easily constructed. The return for the first two months after placement is simply the price at the end of the second month, less the market price on the placement date, divided by the market price on the placement date. Similarly, the return for any given number of months after placement can be computed by deducting the price at placement from the price at the end of the period in question and dividing by the beginning price. Postplacement cumulative returns are constructed for

one through twelve months. In addition, a twoyear cumulative return is constructed to measure returns over the entire test period.' We shall call these returns raw returns. "Month-end market prices were secured from the National Stock Summary for the 12 consecutive months following the placement. In addition, a month-end price for 24 months following the placement was secured for each placement. 14On some placements, purchasers will agree to a purchase price in advance of the actual acquisition. Any price movement in the freely traded stock between the agreement and acquisition will cause discounts on these alternative dates to differ. Since only acquisition date discounts were available for most placements in the sample, these discounts are used for the analysis. For a limited number of placements, both acquisition and agreement data discounts were available and little difference in average discounts was observed for these placements. For a complete discussion, see R. D. Johnson, op. cit. ' This return is measured solely in terms of capital appreciation. To the extent that sample firms paid cash dividends over the test period, such a return will underestimate total returns. Given the make-up of the sample, the underestimation of returns using only capital appreciation is likely to be slight. Most of the firms in the sample are smaller firms whose stock trades in the overthe-counter market. The dividend for such firms is typically a very small component of total return. " Month-end prices were not obtained for months 13 through 23.
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Raw returns on individual securities are affected by marketwide information as well as by information which is unique to the firm. If information which implied a downward adjustment for stock prices in general became available in the post-placement period, downward adjustment in prices may be attributed solely to that marketable information. To assess any abnormal pattern in returns, we must adjust for marketwide information which affects the performance on all securities. One form of adjustment requires that the return on a broad index of common stock be subtracted from the return on the individual security.' 7 Returns for the broad index of stocks are calculated from the Standard and Poors Composite Index using the same method used in this article to calculate returns for individual companies. Excess returns are cumulated for the post-placement period in a like manner to cumulative raw returns. 18 An example of the calculation of an excess return is easily constructed. Suppose that shareholders of a firm earn a return of .12 (12%) for a three-month period following placement and that a broad index of common stock earned a return

of .15 (15%). The excess return over that period is calculated by subtracting the return on "the index from the raw return earned by shareholders, in this instance
raw return .12 index return .15
= -

excess return - .03

Even though this security earned 12 percent, its excess return is negative compared to the index return on common stock. Cumulative raw returns and cumulative excess returns for the sample are displayed in Table 2. The cumulative return and cumulative excess return for the sample turns negative in the second month following placement and remains negative thereafter. The mean cumulative return for the two-year period is -50.8 percent, with 90 percent of sample observations experiencing negative returns. The market adjusted excess return for the same period is -46.4 percent, with 88 percent of sample observations experiencing negative excess returns.1 9 The results indicate (1) that negative information appears to become available to the market sometime following the placement, and (2) that the information has a significant negative impact on the value of issuer's publicly traded stock.

Table 2: Sample Cumulative Mean Returns and Excess Returns Following the Placement Month Following Placement 1 2 3 4 5 6 7 8 9 10 11 12 Raw Returns .021 -. 036 - .056 -. 039 -. 075 -. 132 -.182 -.189 -. 196 - .219 -.267 - .261 Proportion* Negative .605 .641 .628 .628 .640 .709 .791 .733 .767 .791 .826 .969 Market Adjusted Excess Returns .027 -. 026 - .050 -. 032 -. 066 -. 116 -.153 -.155 - .168 - .194 -.239 - .242 Proportion Negative .570 .605 .686 .593 .651 .651 .709

.709
.767 .757 .791 .821

24

- .508

.905

- .464

.881

*Proportion of sample observations for which cumulative returns were negative.

" This form of adjustment has solid theoretical underpinnings which are not discussed here. See note 19, infra. . Note that since dividends are ignored in the composite index and since dividends are a larger proportion of returns for the index than for our sample of firms, the

adjusted return is upward biased. That is, the adjusted return would be expected to be lower if dividends were included in both our sample and the index. 19Excess returns in Table 2 implicitly assume that the securities in the sample are of equivalent risk to the securities that make up the S & P Index. Most of the (Continued on following page.)

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Post-placement Returns and Discounts.A positive relationship between the discount on a placement and the decline in price of the issuer's public stock following the placement was predicted earlier in this article. This prediction was based upon consideration of both the issuecost dilution effect and information effects. If the purchasers of private placements can assess both the value of information that is immediately available to them and the value of the dilution effect, a positive relationship between discounts and post-placement returns should be found. To examine this relationship, the sample was partitioned into high and low return groups on the basis of excess returns. Placements below the median two-year excess return were classified into the low return group, with remaining placements being classified into the high return group. Mean and median discounts were compared to determine if discounts on the low return group are significantly larger than those on the high return group. The mean discount for the high return group was 29 percent while the mean discount for the new low return group was 39 percent. Median returns for the high and low return groups were 30 and 40 percent, respectively. These differences are statistically significant at the 3 percent level2 0 We find support for the dual hypotheses that information is released during placement and that information is reflected in the placement price. As a second test of the relationship between the placement price and the valuation of information disclosed to the purchaser, the correlation between discounts and post-placement excess returns was examined. If purchasers have access to information and are able to assess the value of the information without bias, a negative relationship between abnormal returns and discounts should be found. As is predicted by both information and issue costs effects, post-placement returns and discounts are negatively correlated. The Pearson Correlation coefficient between discounts and two-year excess returns is -. 218. The nonparametric Spearman Rank Order Correlation coefficient between discounts and two-year excess returns is -. 238.21 Investment Company Returns on Letter Stock Placements.-As a final test, let us examine the returns to the purchasing investment companies to see if such returns are consistent with a significant marketability effect. The purchase price of an acquisition should reflect both

the value of information revealed in the placement process and any opportunity costs associated with impaired marketability. If the purchase price reflects an unbiased assessment of the value of information, positive returns to the purchasers would be consistent with the existence of a discount for lack of marketability. That is, if the owners are being compensated for resale restrictions, they should realize positive excess returns on their investment. Cumulative raw and adjusted returns for the entire 24-month period were constructed in an attempt to identify a marketability component of the return to investment companies. This twoyear return is used because it corresponds to a minimum holding period that would satisfy investment intent and Rule 144. The mean raw return is -. 17.7 percent, with 77 percent of the investment companies experiencing negative returns. The market adjusted mean return is -. 13.2 percent, with 79 percent of the purchasing funds experiencing negative returns.2 2 On average investment company returns do not appear to be positive. If any tendency is present, it is a tendency for negative excess returns. Returns experienced by the investment companies are not consistent with a significant discount for lack of marketability.

IV.

Concluding Remarks

Valuation experts have used the differences between the placement price of restricted stock and the price of a firm's outstanding, freely traded stock to assist them in estimating a dis(Footnote 19 continued.) firms in the sample were smaller firms whose stock trades in the over-the-counter market. Reisearch has shown that the stocks of smaller over-the-counter firms tend to be more volatile than the stock of larger firms which trade on organized exchanges. Excess returns were also constructed under the assumption that the sample stocks were twice as volatile as the securities that make up the index. The results still show large negative excess returns and conclusions of the study do not change. For a complete discussion, see Chapter V, R. D. Johnson, op. cit. ",Detailed discussions of statistical tests of significance in the difference in discounts for the samples appear in R. D. Johnson, op. cit., Chapters V and VI. " Both correlation coefficients are statistically significant at the 5 percent level. For a detailed discussion of these tests, see Chapter VI, R. D. Johnson, op. cit. ' The median return figures were substantially lower. The median raw return was -60.9 percent while the median market adjusted return was -44 percent. Further examination of the investment company returns indicated that returns on nine placements exceeded 100 percent. These returns cause the mean to be substan-

tially larger (less negative) than the median.

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count for lack of marketability. While on the surface this difference seems to be a good proxy for a marketability discount, closer examination indicates that new information and implicit issue costs which accompany placement are also likely to affect the placement price and thereby the usefulness of any placement price discount as a proxy for the valuation impact of impaired marketability. Results of the analysis are consistent with existence of information and issue costs effects. Mean raw returns and excess returns on the issuers' freely traded stock were large and negative following placement. A significant relationship between the price decline of freely traded

stock and the placement price discount was found. And purchasers of placements did not earn excess, positive returns following placement. Nowhere in the analysis is there support for the contention that discounted placement prices on restricted securities reflect only impaired marketability of those securities. Our findings do not deny the existence of a marketability effect. They do suggest, however, that to use placement price discounts as proxies for marketability discounts is both misleading and capricious. We must look elsewhere for direct evidence of the magnitude, if any, of a discount for impaired marketability. 0

Tax Meetings
University of Chicago.-The Thirty-Fourth Annual Federal Tax Conference, sponsored by the University of Chicago School of Law, will take place October 28-30, 1981, at the Presidential Ballroom of the Midland Hotel in Chicago. The final program includes the following speakers and topics: Wednesday Morning, October 28.-Glen Miller (Arthur Young & Company, Chicago) -Quantitative analysis in financial decision-making for taxes. An examination and evaluation of the alternative approaches to quantitative analysis in tax-motivated financial decision-making. Particular emphasis will be placed on the time value of money, discounting, rates of return, and the use of computer models; Richard A. Noffke (Sidley & Austin, Chicago) -Discharge of indebtedness under the Bankruptcy Tax Act of 1980. An examination of the new statutory provisions governing debt forgiveness and their application to debtors in a bankruptcy case and to solvent and insolvent debtors outside bankruptcy; David E. Watts (Dewey, Ballantine, Bushby, Palmer & Wood, New York)-Corporate acquisitions and divisions under the Bankruptcy Tax Act: the new "G" type reorganization. Wednesday Afternoon, October 28.-James M. Roche (McDermott, Will & Emery, Chicago)Planning to minimize the tax impact of corporate distributions. An analysis of strategies for avoiding income recognition at the corporate level upon distribution of assets in kind and planning possibilities to minimize the tax impact on shareholders (corporate and noncorporate) of various
August, 1981

types of corporate distributions; Arthur S. Rollin (Mayer Brown & Platt, Chicago) -Fragmenting a business enterprise to improve the tax position of corporations and stockholders; a panel discussion of both topics, with James M. Roche, Arthur S. Rollin and William L. Morrison (Gardner, Carton & Douglas, Chicago). Thursday Morning, October 29.-Martin D. Ginsburg (Georgetown University Law Center, Washington, D. C.)-Rethinking the tax law in the new installment sales world; Eugene H. Watchtel (Lord, Bissell & Brook, Chicago)Pension and profit sharing problems in corporate acquisitions and financing; Robert Anthoine (Winthrop, Stimson, Putnam & Roberts, New York)-The collectors versus the Collector: beachheads and battlegrounds in which collectors of taxes confront collectors of objects. Thursday Afternoon, October 29.-Stephen S. Bowen (Kirkland & Ellis, Chicago)-The reach of Section 351: using the section as a way of bypassing restrictions and adverse results under the reorganization and other provisions; Louis S. Freeman (Sonnenschein Carlin Nath & Rosenthal, Chicago)-The new vintage of tax strategies involving interest on actual, constructive or intended indebtedness: a medley of evolving techniques in corporate, partnership and real estate financings; a panel discussion on both topics with Stephen S. Bowen, Louis S. Freeman and Burton W. Kanter (Kanter & Eisenberg, Chicago). Friday Morning, October 30.-Roscoe L. Egger, Jr., Commissioner of Internal RevenueCurrent developments in tax administration;

TAXES-The Tax Magazine