there are two proposed successive butterfly reorganizations in which DC, which is a CCPC whose assets include development real estate, mortgage receivables and portfolio investments and which is owned by a testamentary trust, a subsidiary ("Newco 1") of the estate and a Mr. B, transfers a portion of its assets on a butterfly reorganization to a corporation ("Transferee A") owned by the same shareholders, and Transferee A then transfers a portion of its assets on a butterfly reorganization to a corporation ("Transferee C") owned by Mr. B.
On both butterfly distributions, the amount of the cash to be transferred to Transferee A or C will be determined within X days of the transfer of the other property to such transferee corporation and an adjustment will be made as required to the amount of cash transferred (para. 41, 53).
At or around the time of the above transactions, and following the exchange by the trust of its exisiting shares of DC for two new classes of shares, one of which will be retained by it and the other transferred by it on a share-for-share exchange to Transferee A, DC will pay in cash a capital dividend on the shares retained or to be retained by the trust.