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August 21, 1959

ROEBLING SECURITIES CORPORATION, a New Jersey corporation in dissolution, Plaintiff,
UNITED STATES of America, Defendant

The opinion of the court was delivered by: FORMAN

The Roebling Securities Corporation, a New Jersey corporation in dissolution, has moved for summary judgment pursuant to Rule 56, F.R.C.P. in this action brought under 28 U.S.C. ยงยง 1340 and 1346(a)(1) (1952 ed.) to recover taxes and interest of $ 190,404.11 and $ 21,420.46 respectively, assessed and collected by the Government for the calendar year 1954.

The Government moves 'for partial summary judgment * * * concerning the matters set forth in paragraphs 7 through 12 of the Amended Complaint * * *.' *fn1" and for an order directing Roebling to produce:

 '1. All correspondence had between [Roebling] and Curzen Dobell pertaining to the sale by [Roebling] on January 21, 1955 to Curzon (sic) Dobell of all its claims against Preload Inc., and all of the Preload Inc. stock which it owned, for an aggregate price of $ 200,000.

 '2. All documents and records pertaining to the sale transactions set out in the preceding paragraph.'

 Roebling's motion will be considered first. It involves only one phase of the case which if decided in Roebling's favor would dispose of the entire suit.

 The following pertinent facts inter alia have been stipulated:

 1. Prior to the end of 1952 plaintiff engaged in the manufacture and sale of steel and copper wire and wire products and related business activities. On December 31, 1952, its corporate name was changed from John A. Roebling's Sons Company to The Roebling Securities Corporation.

 2. On December 8, 1952, plaintiff entered into two agreements: one with the Colorado Fuel & Iron Corporation, (hereafter referred to as CF&I), and the other with the latter's subsidiary, the Colorado Steel Corporation, (hereafter referred to as Steel).

 3. The agreement with Steel was for the sale of plaintiff's operating assets for $ 23,000,000, subject to certain adjustments *fn2" and the assumption of certain of plaintiff's liabilities. *fn3"

 4. In the agreement with CF&I, plaintiff agreed to purchase from it 200,000 shares of 5 1/2% cumulative preferred stock, which constituted the entire Series B issue, for $ 10,000,000.

 5. Each agreement was expressly conditioned upon the simultaneous consummation of the other and each provided that if, for any reason, the other was not consummated the obligations of each party therein would cease and determine without liability on the part of either party to the other. *fn4"

 6. These agreements were consummated simultaneously at a closing held on December 31, 1952, which occurred in the following steps:

 (a) Steel paid plaintiff $ 10,000,000.

 (b) Plaintiff paid $ 10,000,000 to CF&I for the issuance to it of the 200,000 shares of Series B preferred stock.

 (c) CF&I paid to Steel $ 14,999,000.

 (d) Steel paid plaintiff $ 13,000,000 of the $ 14,999,000 it had received from CF&I.

 7. As of December 31, 1952 CF&I had issued and outstanding 2,478,684.25 shares of common stock of no par value; 47,521 shares of 5% preferred stock, Series A, of the par value of $ 50 a share; and 200,000 shares of 5 1/2% preferred stock, Series B, of the par value of $ 50 a share, which entire issue was conveyed to the plaintiff on the date as stated above. 8. At the time of the closing, the 5% preferred stock, Series A, of CF&I was not listed on any stock exchange but was traded in the Over-the-Counter Market. At the end of December, 1952, CF&I Series A preferred stock was quoted at $ 40 bid and $ 43 asked. At the end of each of the last four months of 1952 and the first four months of 1953 this same issue was quoted as follows: Bid Asked September, 1952 42 44 October, 1952 41 43 November, 1952 41 43 December, 1952 40 43 January, 1953 40 42 February, 1953 38 41 March, 1953 38 42 April, 1953 38 41


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