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¶Outright sale of Du Pont's G.M. holdings on the open market. Though such a disposal would undoubtedly satisfy the Government, it would hardly please Du Pont stockholders. The offering would be history's biggest, by far, and financial men doubt that the market could handle it, except over a long period of time. Du Pont would also be forced to pay an estimated $600 to $700 million capital-gains tax on the sale. And if it then kicked back the proceeds to Du Pont stockholders, they would have to pay straight income taxes on the subsequent cash dividend.
¶ Direct distribution of the stock to Du Pont stockholders as a dividend. One, stumbling block is that the Government would probably disapprove, because the Du Pont family would still wind up with 6.4% of G.M.'s total stock. Another problem is that since the stock is not Du Pont stock (which would not be taxable when distributed), but G.M. stock, it would be considered a regular dividend taxable at full market value and normal income tax rates.
¶Creation of a special nonvoting stock for the 64 million shares held by Du Pont interests. While this method would effectively bar Du Pont from control, it has the advantage of allowing the company to continue to get its General Motors dividends for the benefit of its business and stockholders, while avoiding the enormous capital gains tax. Even so, some stockholders may grumble that one of the reasons why they had bought Du Pont stock was for its voice in G.M. affairs, and that the value of their equity had decreased materially.
No one knows how the matter will finally be settled. In Chicago last week Federal Judge Walter LaBuy, ordered by the Supreme Court to make the final disposition, announced that it might take six months or more before he could start hearings. It will be years before the U.S. hears the last of the case. In other smaller cases, the courts have taken as long as five years to dispose of stock interests. With Du Pont, it may take a decade to sever its ties to G.M. and the U.S. auto industry.