Dave, I'm just relaying what I found while researching DRS. There was mention that because of how the cash payment is treated under tax law, it's not taxable under a capital reorganization if the reorganizing company is not yet profitable. Perhaps the term dividend was incorrect. As always, people should consult their tax professional before making this determination. Personally, I research this on my own because I've had too many experiences of tax professionals giving bad or incorrect advice.

Whatever the tax treatment, it will certainly be tax-free for those holding shares in IRA and similar retirement plans.