The continuity of interest doctrine requires that all target shareholders receive some acquiring stock.

Question

Quizplus · Accepted Answer

The continuity of interest doctrine requires that a substantial portion of the value of the property transferred by the target company to the acquiring company be preserved in a reorganization. It does not mandate that all target shareholders receive acquiring stock, but rather that a significant portion of the overall transaction involves the exchange of stock to maintain continuity.

The Continuity of Interest Doctrine Requires That All Target Shareholders