Which of the following statements is correct with regards to liabilities in corporate reorganizations?
A)While in a "Type A" merger all the liabilities of the target must be acquired, in a consolidation only general liabilities are transferred.
B)In a "Type G" reorganization, the target's liabilities rarely are liquidated.
C)Liabilities are problematic for a "Type C" only when the acquiring corporation transfers other property in addition to common stock.
D)Long-term liabilities (bonds) can be exchanged tax-free in a "Type E" reorganization, as long as the terms of the bonds are greater than 10 years and the interest rates are identical.
E)None of the above.

Question

Quizplus · Accepted Answer

In a "Type C" reorganization, liabilities can be problematic if the acquiring corporation transfers property other than stock, as it may affect the tax-free status of the reorganization.

Which of the Following Statements Is Correct with Regards to Liabilities