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Actionable news in LINE: Linn Energy, LLC,

Linn Energy Really Wants You To Do That Exchange


Linn Energy extends its offer to exchange LINE units for LNCO shares by a week through April 25, 2016.

This exchange is a way for Linn Energy unitholders to avoid possible CODI resulting from a debt reduction and/or restructuring.

This move could also mean that some sort of deal is coming soon.

Though, the outlook for both remains gloomy.

Linn Energy (NASDAQ:LINE) (NASDAQ:LNCO) recently announced that it has extended the expiration of its exchange offer by one week through April 25, 2016. Basically, the company is offering to exchange each unit of Linn Energy for one share of the C-Corp subsidiary LinnCo.

Avoiding CODI game

Linn Energy is making this deal for one big reason-- for its unitholders to avoid cancellation of debt income, or CODI. As a LLC, this "income" flows down proportionally to unitholders and is taxable. While the tax situation of each Linn Energy unitholder is unique, this is an unwelcome and often unexpected tax liability.

Though, this phantom income has to go somewhere and that place is LinnCo. If Linn Energy books CODI, then LinnCo will be the one with the liability as it would own the Linn Energy units.

Linn Energy is broke. And so is...