The chart tracks a state-law consolidation across three panels. In the Initial Structure, the Z shareholders own Corp Z and the V shareholders own Corp V — two separate corporations with no common ownership.
In the Consolidation, a single set of events occurs simultaneously at the effective time under State W law: Corp Y is created in the transaction, all of the assets and liabilities of Z and V become the assets and liabilities of Y, the Z and V shareholders surrender their Corp Z and Corp V stock, and Y stock is issued to those shareholders. The existence of Z and V continues in Y.
At the Ending Point, the former Z and V shareholders together own all of Corp Y, which now holds the combined assets and liabilities of both predecessor corporations. Because each of Z and V is a combining entity of a transferor unit whose assets and liabilities become those of Y (the combining entity and sole member of the transferee unit), and each of Z and V ceases its separate legal existence, the transaction qualifies as a statutory merger or consolidation of each of Z and V into Y under section 368(a)(1)(A).
Everything happens simultaneously at the effective time under State W consolidation law: Y is created, Z and V assets and liabilities move to Y, and the shareholders exchange stock.
Corp Y does not pre-exist the transaction — it is the combining entity and sole member of the transferee unit that emerges from the consolidation of Z and V.
Z and V each cease their separate legal existence for all purposes, and their existence continues in Y, satisfying paragraph (b)(1)(ii).
The consolidation of each of Z and V into Y meets the definition of a statutory merger or consolidation under section 368(a)(1)(A).
