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pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Probably Not Going to Help

If these rural markets are not profitable for Verizon, then there's still nothing stopping them from selling them off anyway.
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"Net Neutrality" zealots - the people you can thank for your capped Internet service.


tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

1 recommendation

said by pnh102:

If these rural markets are not profitable for Verizon, then there's still nothing stopping them from selling them off anyway.

No, there is not, but it would be less tempting/expensive to do, without the tax break, provided by the RMT.

The intent of the RMT was to allow Corp. to spin off SUCCESSFUL divsions into seperate businesses, IF they no longer matched the Corp.s core business, without excess tax liability for either the parent, shareholders, or the new business. A valuable tool for de-consolidating businesses before they became "too large to fail".
However, it didn't have the safegaurds to prevent it from being used to dump unwanted assets and DEBT onto the discarded portions, benefiting ONLY the parent.
Don't know if it should be illegal, but the conditions should be HIGHLY regulated against these abuses.


pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

1 edit
said by tshirt:

The intent of the RMT was to allow Corp. to spin off SUCCESSFUL divsions into seperate businesses ...
You could make the argument that these divisions were successful. If they were failures, in terms of not making a profit, Verizon would have pulled the plug on them on their own, with or without selling them off.

The problem in Verizon's eyes were that these areas were profitable, but not profitable enough. In all the cases, you can easily note the mistakes that were made by the companies that bought these assets. They quickly turned something that was moderately profitable into a loser.
--
"Net Neutrality" zealots - the people you can thank for your capped Internet service.


tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast
But they are exactly verizons core business.
The part that's wrong, is them loading debt on the new business entity, while taking the tax advantage for themselves, The RMT idea was a clean cut, equal assets and debt spun into the new business and the shareholders/parent recieved stock in return, so no tax liability as no value changed hands.
This case is a defacto sale and should be taxed as such (in which case, verzion would probably not proceed)
(not that the proposed law will effect this sale)


FFH5
Premium
join:2002-03-03
Tavistock NJ
kudos:5

1 recommendation

said by tshirt:

(not that the proposed law will effect this sale)
I think that will be the case. The Verizon deal is grandfathered in under the new law.
»Verizon transaction exempt from law
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