Supreme Court Strikes Down “Bob Richards” Rule, Impacting Consolidated Group Members’ Entitlement to Tax Refunds in Bankruptcy Proceedings

On February 25, 2020, in Rodriguez v. FDIC,1 the U.S. Supreme Court unanimously rejected the application of the so-called “Bob Richards” rule, a judicial doctrine that was developed in the context of a bankruptcy case almost 60 years ago concerning ownership of tax refunds secured by the parent corporate entity on behalf of a bankrupt subsidiary included in a consolidated group tax return.

Filed under:
USA, Banking, Insolvency & Restructuring, Litigation, Tax, O'Melveny & Myers LLP, Bankruptcy, Internal Revenue Service (USA), Ninth Circuit, Tenth Circuit
Authors:
Alexander Anderson , John J. Rapisardi , Billy Abbott , Alexander Roberts , Matthew P. Kremer , Dawn Lim
Location:
USA
Firm:
O'Melveny & Myers LLP
Proposed Regulations May Significantly Reduce the Value of Net Operating Loss Carryforwards and the Value of Companies with Net Operating Losses

On September 9, 2019, the Treasury Department and IRS issued new proposed regulations (REG-125710-18) (the “Proposed Regulations”) affecting how companies with net operating losses (“NOLs” and such entities, “Loss Companies”) will calculate the ability to use such losses following an ownership change in the wake of the Tax Cuts and Jobs Act, P.L. 115-97 (2017) (“TCJA”).

Filed under:
USA, Company & Commercial, Corporate Finance/M&A, Insolvency & Restructuring, Tax, O'Melveny & Myers LLP, Tax Cuts and Jobs Act 2017 (USA)
Authors:
Alexander Anderson , Robert Blashek , Robert Fisher , Arthur V. Hazlitt , Luc Moritz , Jeff Walbridge , Dawn Lim
Location:
USA
Firm:
O'Melveny & Myers LLP