Is the Coro Distribution a dividend or a minor screwing ? In that Benton referred to the Coro share distribution as a dividend, addled as management may be, it is more than likely it was not an accidental use of the term dividend.
Its a tax question that normally should be easily answered by a tax specialist.
Their may be another issue. For example, suppose a share distribution of a different company ( CORO) would normally be a dividend whereas a distribution of shares in the first copany BTC would not. ? In that case what about the fact that BTC is really a holding company and in effect the whole company is being distributed which means that it is a de facto distribution of BTC shares in the form of CORO. If that is the case why would Benton call the distribution a dividend? It may be for tax reasons favorable to BTC and adverse to the stockholders receiving the now taxable distribution.
For example BTC may keep on is books all the basis it paid for CORO which is now a total loss to BTC and a tax credit. That BTC has Goodchild and 1.5 million in cash because Stares was taking huge options in lieu of salary, does not change the fact that BTC up to now has been all CORO.
The Benton gang still will have control to some extent of BTC and the cash and Goodchild and so it may not be looking out for the shareholders even thought the Benton gang members will be getting Coro shares for any BTC shares they hold. So my question is could BTC have maintained that the CORO distribution is not a taxable dividend ( if indeed it is) and if so can stockholders speak out and argue for a change. It may be that the term divident means that the shares come with zero basis but are not taxable now. Or could the basis be transferred so BTC does not keep the original purchase price as a tax loss?
I dont know but in view of what I see at the top, I think questions should be asked.
Canada Moose
Canada Moose