Bankruptcy Finance & Banking Tax

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Your daily dose of financial news The Brief – 4.21.16

Dealbook’s White Collar Watch gives us a legal take on the many challenges, regulatory and otherwise, facing Elizabeth Holmes’ Theranos – NYTimes... The international financial scandal du jour (the Panama Papers) is...more

IRS Agrees Traditional Bad Boy Guarantees Do Not Change Character of Nonrecourse Loan

The Internal Revenue Service has apparently seen the light — at least with respect to the effect of “bad boy” guarantees on a loan that is otherwise nonrecourse for income tax purposes. Last month, we reported that the IRS...more

Virtual Currency Guidelines

Despite growing pains, digital currencies and blockchain may be the future of payments and global finance. As with any disruptive technology that gains popularity quickly, building the legal framework to support it is...more

Private Equity Funds Liable for Portfolio Company's Pension Obligations

A U.S. District Court issued a ruling on March 28 that affects pension liabilities for private equity funds and their portfolio companies. Taken further, the ruling potentially changes fundamental rules for tax-qualified...more

Tax Treatment of “Bad Boy Guarantees” Challenged by Recent IRS Memorandum

I. OVERVIEW - A recently released legal memorandum by the Internal Revenue Service (IRS) Office of Chief Counsel, CCA 201606027 (the “Memorandum”), concluded that a so-called “bad boy guarantee” provided by a sponsor of...more

Bad Boy Guarantee May Cause Deductions From Nonrecourse Loan to be Reallocated

In a recent Internal Litigation Memorandum, the Internal Revenue Service found that a nonrecourse loan containing certain “bad boy” guarantees required the loan to be treated as a recourse loan for federal income tax...more

Secured Creditors Beware: Liability Lurks in Lockboxes

Lenders and secured creditors often require that debtor-customers direct all receivable collections into a lockbox, hoping to wrangle any available proceeds to apply to their debtors’ outstanding debt. In requiring a debtor...more

Loan Transaction Costs IRA its Bankruptcy Exemption

A recent case illustrates a common problem with IRAs when their participants declare bankruptcy. Generally, IRAs are exempt assets in bankruptcy proceedings, and are thus beyond the reach of the bankrupt individual’s...more

Secured Creditors in Section 363 Sales Be Aware -Your Proceeds May Be Used to Satisfy the Debtor’s Unpaid State Tax Liabilities

It is a basic feature of sales under section 363 of the U.S. Bankruptcy Code, that the purchaser takes free and clear of all claims and interests, such claims and interests attach to the proceeds of the sale in accordance...more

Home Sweet Homestead

Suppose a debtor denies owning a home and then gives a false address so creditors don’t find out about the home. Can the debtor still claim the homestead exemption in bankruptcy?...more

The 1099-C Issue: Potential Tax Liability in Debt Settlement and Bankruptcy

When you owe debts that you cannot pay most will look to one of two options – debt settlement or bankruptcy. What many don’t realize is that in some circumstances there is the potential for additional tax liability even if...more

3 Strategies to Getting the Lowest Debt Settlement Possible

Settling debt is the process of negotiating with your creditors a payment less than the total amount owed. Often times people feel that as a person who is struggling to pay your bills that you are negotiating from a weaker...more

Reinstatement of a LIHTC LURA following foreclosure

Note: This post is the final part of a continuing series on the Credit Report Blog on the subject of workouts and bankruptcies involving low-income housing tax credit (LIHTC) projects....more

LIHTC exit strategies: Right-sizing the loan

Note: This post is part of a continuing series on the Credit Report Blog on the subject of workouts and bankruptcies involving low-income housing tax credit (LIHTC) projects...more

Continued Disagreement: Use of Federal Debt Collection Laws to Expand Fraudulent Transfer Look-Back Periods

In Ebner v. Kaiser (In re Kaiser), the U.S. Bankruptcy Court for the Northern District of Illinois allowed a bankruptcy trustee to employ the 10-year look-back period, available to the Internal Revenue Service (IRS) under the...more

IRS Will Not Follow Partner COD Bankruptcy Exception Cases

In a new Action on Decision (AOD 2015-10), the IRS stated that it will not follow the Tax Court’s 2004 Martinez decision, which had allowed a general partner to exclude cancellation of debt (COD) income from a partnership in...more

Commercial Restructuring & Bankruptcy Alert - February 2015

In This Issue: - Minority Holders Gain Leverage Through Recent Interpretation of Trust Indenture Act - New Jersey Joins Number of States Creating Specialty Business Courts - Credit Bid Rights Bolstered in...more

The valuation process for LIHTC projects in financial distress: Part II

Note: This post is part of a continuing series on the Credit Report Blog on the subject of workouts and bankruptcies involving low-income housing tax credit (LIHTC) projects....more

The valuation process for LIHTC projects in financial distress – Part I

Note: This post is part of a continuing series on the Credit Report Blog on the subject of workouts and bankruptcies involving low-income housing tax credit (LIHTC) projects. In a previous post, we wrote about the...more

Section 363 Sale Order Enjoining Successor Liability Claims Not Subject to Subsequent Attack by State Agencies

A recent decision in the ongoing bankruptcy proceedings for Chrysler has reinforced the authority of a bankruptcy court to interpret its own sale orders, and where appropriate, to enforce such an order by preventing creditors...more

Municipal Bond Interest Paid By a Bond Insurer After an Issuer’s Bankruptcy Discharge Can Remain Tax-Exempt

In the aftermath of recent municipal bankruptcies in which issuers proposed and/or implemented bankruptcy plans involving partial discharges of the issuer’s payment obligation on insured bonds, there has been increased focus...more

What are the unique dynamics of a low-income housing tax credit workout?

Note: This post is part of a continuing series on the Credit Report Blog on the subject of workouts and bankruptcies involving low-income housing tax credit (LIHTC) projects. ...more

Low-income housing tax credit workouts and bankruptcies: Understanding the basics

Note: This post is the first in a continuing series on the Credit Report Blog on the subject of workouts and bankruptcies involving low-income housing tax credit (LIHTC) projects....more

"The Estate Planner" – November/December 2014

In this issue: - The Sec. 1031 Exchange - A Powerful Estate Planning Tool - Worried About Challenges To Your Estate Plan? Make It No Contest! - Don't Underestimate The Impact Of State Estate...more

Pennsylvania Amends Act 47 to Give the Commonwealth More Oversight and its Municipalities Less Time to Reorganize

Pennsylvania’s legislature recently approved House Bill No. 1773, an overhaul to its Municipalities Financial Recovery Act, commonly known as “Act 47.” HB 1773 was signed into law by Governor Tom Corbett on October 31, 2014....more

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