The French High Court (CE, March 20, 1996) stated that, when, in the case of a tax reassessment plan, a company purchases 77% of the capital of a third company being in a loss position and warrants its debts, the amount of the debts warranted does not constitute any complement of the purchase price of the shares insofar as the takeover has been negotiated at its right price. The provision booked in order to face the probable loss resulting from the commitment made is afterwards deductible. This Court case confirms again the rather liberal part of the case law on this subject.

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