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April 23, 1997updated 05 Sep 2016 12:11pm


By CBR Staff Writer

If you, as AirTouch Communications Inc, want to buy the NewVector cellular businesses from US West Inc, and US West is a willing seller, you do it tax-free by using a so-called Morris Trust procedure whereby you assume the debt of the business you want (NewVector), acquire the whole of US West for AirTouch shares, and then spin off US West minus the bit you want back to its original shareholders, who then own US West shares representing most of the original business, plus AirTouch shares representing the value of NewVector in the enlarged AirTouch equity – or you did. On Thursday last week, two of Congress’s top tax writers, Senate Finance Committee Chairman William V Roth Jr, a Republican from Delaware, and House Ways & Means Committee Chairman Bill Archer, Republican, Texas, proposed legislation to kill off the Morris Trust, and make it retroactive to April 16 – and the bill will likely be passed.

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