Chapter 11 Bankruptcy and Tax Reform: Implications for Reorganized Debtors and 363 Asset Purchasers

Expensing Newly Acquired Assets, Deducting Interest Expense, Utilizing NOL Carryforwards, and More

This program is cancelled

A live 90-minute CLE/CPE webinar with interactive Q&A

Monday, December 31, 2018

1:00pm-2:30pm EST, 10:00am-11:30am PST

This CLE/CPE webinar will examine federal tax considerations in Chapter 11 reorganizations, with particular focus on the ways in which tax reform will affect debtors, creditors and Section 363 purchasers. Panel discussion will include factors to consider to preserve the ability of the reorganized entity to service post-reorganization debt, new tax ramifications for 363 sales, and tax elections to consider in order to achieve the best tax results.


Tax reform enacted in 2017 (the "Tax Act") will have a substantial impact on corporate taxpayers emerging from bankruptcy. Of most relevance, the Tax Act made changes related to the expensing of newly acquired assets, the deductibility of interest and the utilization of net operating losses (NOLs) for federal income tax purposes. Counsel must be able to advise the debtor or 363 purchaser on how best to adjust to these changes.

For federal income tax purposes, a corporate debtor generally realizes cancellation of debt income (CODI) to the extent that its indebtedness is cancelled or satisfied for an amount less than the amount of the debt. Chapter 11 allows for certain adjustments, but these adjustments may change under the Tax Act depending on various factors.

Financial modeling is necessary to better understand after-tax cash flow in the years following emergence from bankruptcy. The Tax Act may impact modeling for corporate bankruptcies in several ways, including the new bonus-depreciation rule, the limitation on deductibility of interest expense, and new treatment of NOLs. Tax elections available under Chapter 11 can have a material effect on the tax liability of the reorganized debtor or 363 asset purchaser, and must now be considered in light of the Tax Act.

Listen as our authoritative panel examines the tax ramifications of Chapter 11 reorganization and the impact of the Tax Act on reorganization strategies. The panel will discuss CODI, modeling techniques, and some of the new rules that should be considered in trying to get the best tax result for the debtor or 363 purchaser.



  1. Overview of Federal Income Taxation in Chapter 11 Reorganizations
    1. Cancellation of Debt Income (CODI)
    2. Offsets Under the IRC
    3. Newly acquired assets - Section 363 sales
  2. Impact of tax reform
  3. Financial and tax projections/modeling


The panel will review these and other critical issues:

  • Why is tax planning a crucial step in formulating a reorganization plan?
  • What changes under the Tax Act should be of most concern to reorganized debtors and 363 purchasers?
  • How is CODI calculated, and how will those calculations change under the Tax Act?
  • How can financial modeling be used to forecast after-tax flow after a debtor emerges from bankruptcy? Which variables will be impacted by the Tax Act?


Liebman, Rich
Rich D. Liebman

Managing Director, Transaction Tax Services
Grant Thornton

Mr. Liebman is a managing director in Grant Thornton’s Transaction Tax Services practice in Chicago. With over 30...  |  Read More

Additional faculty
to be announced.