This excerpt taken from the ABII 8-K filed Nov 8, 2007.
The Holding Company Merger
The obligations of the parties to effect the holding company merger are conditioned upon the receipt of a private letter ruling from the Internal Revenue Service (which private letter ruling was received by Old Abraxis on October 5, 2007) to the effect that the holding company merger qualifies as a reorganization under Section 368(a)(1)(F) of the Internal Revenue Code. The private letter ruling provides that the material U.S. federal income tax consequences of the holding company merger will be as follows:
The private letter ruling described above is based, in part, on assumptions and representations as to factual matters that have been received from Old Abraxis, as requested by the Internal Revenue Service. If any of those assumptions or representations is inaccurate as of the effective time of the holding company merger, the tax consequences of the transactions could differ materially from those described herein.
If the holding company merger does not qualify as a reorganization under Section 368(a)(1) of the Internal Revenue Code, each Old Abraxis stockholder who receives Abraxis BioScience common stock in exchange for Old Abraxis common stock would recognize taxable gain or loss equal to the difference between the fair market value of the Abraxis BioScience common stock received and such stockholders basis in the Old Abraxis common stock exchanged therefor, and Old Abraxis would recognize taxable gain equal to the fair market value of its assets over their aggregate adjusted basis.