In Bazley v. Commissioner, 331 U.S. 737 (1947), the two individual taxpayers owned all but one of 1000 shares of a family corporation. In the transaction there involved, the taxpayers exchanged all of their shares of common stock for a pro rata number of new shares of common stock and $400,000 principal amount of ten-year debentures. The taxpayers claimed that the gain realized on their receipt of the debentures should not be recognized because the transaction was a recapitalization within the meaning of I.R.C. Sec. 112(g)(1)(D) (the 1939 Code predecessor of Sec. 368(a)(1)(E)), and I.R.C. Sec. 112(b)(3) postponed the recognition of gain by a taxpayer who received obligations as part of such a recapitalization. The IRS contended that the transaction in fact was a dividend disguised as a recapitalization. Support for the IRS contention could be found in the fact that the taxpayers maintained control of the corporation in the same ratio as they had prior to the transaction. The Bazley Court agreed with the IRS and held that the taxpayers could not postpone the recognition of their gain. The thrust of the decision was that, while the transaction resembled a reorganization that might warrant tax-deferred treatment, the resemblance was only in a technical sense. The Court discussed the characteristics of the types of transactions for which Congress permitted taxpayers to postpone the recognition of their gains, but held that this essentially dividend-like transaction had none of those characteristics. 25 It was in the foregoing context that the Court made the statement upon which Microdot places heavy reliance: "Since a recapitalization ... is an aspect of reorganization, nothing can be a recapitalization for this purpose unless it partakes of those characteristics of a reorganization which underlie the purpose of Congress in postponing the tax liability."331 U.S. at 741.