Which of the following statements regarding the applicability of the judicial doctrines to a "Type G" reorganization is correct?
A) The continuity of interest doctrine is applied to the creditors rather than the shareholders.
B) The sound business purpose doctrine does not apply because the restructuring is dictated by state proceedings.
C) The continuity of business enterprise doctrine does not apply because the business must change to be profitable.
D) The step transaction doctrine presents a problem, because a "Type G" reorganization may take an extended period of time to complete.
E) All of these.

Question

Quizplus · Accepted Answer

In a "Type G" reorganization, which involves bankruptcy or insolvency proceedings, the continuity of interest doctrine is applied to the creditors rather than the shareholders, as creditors become the new owners of the reorganized entity.

Which of the Following Statements Regarding the Applicability of the Judicial