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The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders.

When a spin-off occurs, the shareholders of the parent corporation are not required to surrender any of their parent corporation stock in exchange for the subsidiary's stock.

In the event that the distribution of stock to the parent corporation's shareholders amounts to a dividend, the distribution can be taxed pursuant to provisions of Income Tax statutes.

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HPT also announced that the closing of the spin off and the distribution of TA shares is now expected to occur on or about January 31, 2007.
As we finalize our preparations to spin off Sara Lee Branded Apparel, it is important that we formalize the management organization that will lead the new company," said Brenda C.
Biovail believes that a spin off of the Legacy products allows both for the underlying value of these assets to be better realized and for a more focused growth strategy for Biovail," said Biovail Executive Chairman Eugene Melnyk.
The Simpsons is the top spin off of choice among those ages 18-24, as 59% rated the show their favorite, followed by Frasier at 15%.