Cities Service Company v. United States

Second Circuit

Cities Service Company v. United States

586 F.2d 967, 42 A.F.T.R.2d (RIA) 6194, 1978 U.S. App. LEXIS 7930

CourtCourt of Appeals for the Second Circuit

DecidedNovember 6, 1978

Docket320, Docket 78-6100

StatusPublished

Cited by1 cases

This text of 586 F.2d 967 (Cities Service Company v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Cities Service Company v. United States, 586 F.2d 967, 42 A.F.T.R.2d (RIA) 6194, 1978 U.S. App. LEXIS 7930 (2d Cir. 1978).

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Opinion

PER CURIAM:

We affirm essentially for the reasons stated in Judge Tenney’s opinion for the district court, reported at 443 F.Supp. 392 (S.D.N.Y.1978). In the prior appeal in this case, Cities Service Co. v. United States, 522 F.2d 1281 (2d Cir. 1974), cert, denied, 423 U.S. 827, 96 S.Ct. 43, 46 L.Ed.2d 43 (1975), we held that issue price for the purpose of calculating “bond discount” was the market value of the debentures on the date of issue. In addition, following the Supreme Court’s holding in Commissioner v. National Alfalfa Dehydrating & Milling Co., 417 U.S. 134, 147, 94 S.Ct. 2129, 2136, 40 L.Ed.2d 717 (1974), we held that “bond discount” and “loss on repurchase” are merely different terms for the same economic phenomenon. 522 F.2d at 1282 n.2. That holding is dispositive of the instant appeal. Appellant’ s contention would permit it, over the life of the debentures, to recover in deductions the entire difference between the amount it pays on repurchase or retirement and the $45 million original consideration *968 for the preferred. This is clearly contrary to our opinion on the first appeal. The judgment is affirmed.

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PER CURIAM:

We affirm essentially for the reasons stated in Judge Tenney’s opinion for the district court, reported at 443 F.Supp. 392 (S.D.N.Y.1978). In the prior appeal in this case, Cities Service Co. v. United States, 522 F.2d 1281 (2d Cir. 1974), cert, denied, 423 U.S. 827, 96 S.Ct. 43, 46 L.Ed.2d 43 (1975), we held that issue price for the purpose of calculating “bond discount” was the market value of the debentures on the date of issue. In addition, following the Supreme Court’s holding in Commissioner v. National Alfalfa Dehydrating & Milling Co., 417 U.S. 134, 147, 94 S.Ct. 2129, 2136, 40 L.Ed.2d 717 (1974), we held that “bond discount” and “loss on repurchase” are merely different terms for the same economic phenomenon. 522 F.2d at 1282 n.2. That holding is dispositive of the instant appeal. Appellant’ s contention would permit it, over the life of the debentures, to recover in deductions the entire difference between the amount it pays on repurchase or retirement and the $45 million original consideration *968 for the preferred. This is clearly contrary to our opinion on the first appeal. The judgment is affirmed.

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586 F.2d 967, 42 A.F.T.R.2d (RIA) 6194, 1978 U.S. App. LEXIS 7930, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cities-service-company-v-united-states-ca2-1978.

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