Walt Disney's Sale of ABC Radio: Structuring a Tax-Efficient Divestiture

How should a firm structure a tax-efficient divestiture?
Jonah Rockoff, Ira Weiss  | Fall 2008
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Jonathan Day, a recent MBA, is tasked with evaluating tax efficient divestitures for his company. Through his perspective, this case provides an overview of taxable and tax-free structures for corporate divestitures. Students will then analyze Disney's sale of ABC Radio, its portfolio of radio stations, to Citadel Broadcasting Corporation using a tax-free structure known as the reverse Morris Trust, and the tax advantages and financial ramifications of the ABC Radio sale for Disney, Disney's shareholders, and Citadel.

Case ID: 080315
Supplemental Materials: Teaching Note

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