Corporate Bankruptcy Tax Refund Litigation After Rodriguez v. FDIC

Interpreting Tax Allocation Agreements Under State Law

Note: CPE credit is not offered on this program

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


Thursday, December 3, 2020

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

Early Registration Discount Deadline, Friday, November 6, 2020

or call 1-800-926-7926

This CLE webinar will examine the effect of Rodriguez v. FDIC (In re Western Bancorp Inc.), No. 18–1269 (Feb. 25, 2020), on the crucial issue of how to resolve consolidated corporate tax refund disputes in bankruptcy cases and how to interpret complicated tax sharing and tax allocation agreements. The program will guide bankruptcy counsel in determining or litigating how to allocate tax refunds absent a tax sharing agreement and how tax sharing agreements are drafted and enforced in bankruptcy.

Description

Consolidated tax returns enable various corporate affiliates to offset their losses against each other and reduce the group's total tax liability. Typically only the parent files a single consolidated return. Any refund is paid to the filing entity, not to individual affiliates, and those affiliates commonly enter into tax sharing and allocation agreements.

These agreements--or the absence of these agreements--generate much litigation in bankruptcy since the refund's ownership determines which entity's creditors may have access to the refund. Before Rodriguez v. FDIC, if an agreement were nonexistent or ambiguous, courts had followed the rule that the refund belonged to the entity that generated the losses giving rise to the refund.

Rodriguez created uncertainty in place of a well-known rule. Now, bankruptcy courts must apply state law to decide whether the group's designated agent is, in fact, only an agent or the legal owner of the refund.

Listen as this panel of bankruptcy and tax attorneys guides counsel on proactive steps that consolidated debtors and their creditors should take before bankruptcy, whether changes before filing can be avoided, factors the court considers in the absence of a tax allocation agreements, and how to draft and enforce tax allocation agreements.

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Outline

  1. Introduction
    1. Overview of consolidated returns
    2. Bob Richards rule
    3. Rodriguez v. FDIC
  2. Applying Rodriguez v. FDIC in bankruptcy
    1. When all members of group are not debtors
    2. When substantive consolidation is absent
    3. Enforcability of "informal" tax sharing agreements (TSA) in bankruptcy
    4. Avoidability of recently entered TSA among affiliates or insiders
    5. Priorities of claims for payment under a TSA
    6. Effect on Section 363 sales and post-bankruptcy acquisitions
  3. Interaction of federal regulations and state law
  4. Bankruptcy litigation issues

Benefits

The panel will review these and other key issues:

  • What is the impact of Rodriguez v. FDIC in corporate reorganzaiton cases?
  • Can courts "redline" or reform allocation agreements?
  • What type of claim do affiliates have against the "owner" of the refund?
  • Are there any equitable bankruptcy principles that might aid an affiliate claiming part of a refund?

Faculty

Schuenemann, Craig
Craig K. Schuenemann

Attorney
Bryan Cave Leighton Paisner

Mr. Schuenemann represents national banks, real estate investment entities, energy companies and corporations in...  |  Read More

Additional faculty
to be announced.

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