Robert and Sylvia propose to have their corporation, Wolverine Universal (WU),acquire another corporation, EMU, Inc., in a tax-deferred triangular Type A merger using an acquisition subsidiary of WU. The sole shareholder of EMU, Edie Eagle, will receive $250,000 plus $150,000 of WU voting stock in the transaction.
a. Can the transaction be structured as a forward triangular Type A merger? Explain why or why not.
b. Can the transaction be structured as a reverse triangular Type A merger? Explain why or why not.