Supreme Court Decides that Pre-Confirmation Transfer Tax Exemptions are No Longer on the Menu in Piccadilly Cafeterias


On June 16, 2008, the United States Supreme Court (the “Court”) held that section 1146(a)[1] of Title 11, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”) only affords a stamp-tax exemption to transfers made pursuant to a confirmed Chapter 11 plan of reorganization, thereby resolving a conflict among several federal circuit courts.[2] While the bright-line rule established by the Court is

clear, its practical implications fail to comport with the realities of most Chapter 11 cases today. The Bankruptcy Code is meant to preserve going concerns and maximize property available to satisfy creditors. The Court’s narrow interpretation of section 1146(a) is inconsistent with these basic tenets and, as a result, debtors must now think twice before conducting asset sales and transfers

prior to confirming a plan of reorganization.

See full legal update for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.