Addressing an issue of first impression, the Second Circuit held recently that bankruptcy courts have inherent authority to impose non-nominal civil contempt sanctions, including per diem sanctions and attorneys’ fees, arising out of an attorney’s failure to comply with the bankruptcy court’s discovery orders.

On April 9, 2013, Ambac Financial Group, Inc. (“Ambac”) submitted a proposed settlement with the United States to the U.S. Bankruptcy Court for the Southern District of New York. If approved, the proposed settlement would resolve more than two years of litigation concerning the tax treatment of losses sustained by Ambac in connection with credit default swap contracts entered into during the 2008 financial crisis. The settlement would result in a payment by Ambac to the Government of $101.9 million, as well as possible future additional payments of up to $14.9 million.

In another recent private letter ruling,¹⁹ the IRS ruled that an ownership change pursuant to a bankruptcy reorganization plan qualified for an exception to the general rule limiting net operating loss ("NOL") carryforwards under Section 382(a).