View all text of Chapter 54 [§ 5881 - § 5881]
§ 5881. Greenmail
(a) Imposition of tax
(b) GreenmailFor purposes of this section, the term “greenmail” means any consideration transferred by a corporation (or any person acting in concert with such corporation) to directly or indirectly acquire stock of such corporation from any shareholder if—
(1) such shareholder held such stock (as determined under section 1223) for less than 2 years before entering into the agreement to make the transfer,
(2) at some time during the 2-year period ending on the date of such acquisition—
(A) such shareholder,
(B) any person acting in concert with such shareholder, or
(C) any person who is related to such shareholder or person described in subparagraph (B),
made or threatened to make a public tender offer for stock of such corporation, and
(3) such acquisition is pursuant to an offer which was not made on the same terms to all shareholders.
For purposes of the preceding sentence, payments made in connection with, or in transactions related to, an acquisition shall be treated as paid in such acquisition.
(c) Other definitionsFor purposes of this section—
(1) Public tender offer
(2) Related person
(d) Tax applies whether or not amount recognized
(e) Administrative provisions
(Added Pub. L. 100–203, title X, § 10228(a), Dec. 22, 1987, 101 Stat. 1330–417; amended Pub. L. 100–647, title II, § 2004(o)(1)(A), (B)(i), (C), (2), Nov. 10, 1988, 102 Stat. 3608.)