Final answer:
The transaction qualifies as a Type C reorganization where the Acquiring Corporation transfers its stocks and cash for most of the Target Corporation's assets, after which the Target settles its liabilities, distributes the assets received to its shareholders, and then liquidates.
Step-by-step explanation:
The restructuring described in the question qualifies as a Type C reorganization. In a Type C reorganization, the Acquiring Corporation transfers its stocks and possibly cash in exchange for substantially all of the Target Corporation's assets, which is the case here. This type of transaction allows the Target to distribute the received stock and cash to its shareholders and then liquidate.
The Target Corporation in this scenario retains only enough assets to settle its liabilities before liquidating, which is consistent with Type C reorganization rules. The nature of this restructuring allows shareholders of the Target to exchange their shares for the Acquiring Corporation's stock and cash and possibly defer taxes on the gain until they later dispose of the Acquiring Corp's stock.
the acquiring corporation exchanges voting common stock and cash for at least 90% of the target corporation's assets. The target corporation's assets are then used to settle its liabilities, and the acquiring corporation distributes the stock and cash received to its shareholders in exchange for all their shares. Finally, the target corporation is liquidated. This type of reorganization allows the acquiring corporation to acquire the target's assets while providing certain tax advantages.