With data privacy issues constantly in the news, what do businesses need to know about handling personal information when they’re considering bankruptcy, especially if some personal information – like customer records – may be a valuable asset?

With data privacy issues constantly in the news, what do businesses need to know about handling personal information when they’re considering bankruptcy, especially if some personal information – like customer records – may be a valuable asset?

The recent unanimous decision of the United States Supreme Court (the “Court”) in Clark v. Rameker, 573 U.S. _____ (2014) held that inherited IRAs do not constitute “retirement funds” within the meaning of section 522(b)(3)(C) of the United States Bankruptcy Code. Consequently, inherited IRAs are not exempt from creditor claims in bankruptcy proceedings. The Court’s holding highlights the importance of sound financial and estate planning to protect inherited retirement plan assets from claims of a beneficiary’s creditors.

Background

In 2012, several judicial opinions have reminded directors, officers and “responsible persons” that personal liability may be imposed for business taxes. See our alert from June 20, 2012. Responsible persons are reminded again that not only will authorities impose liability for unpaid taxes of a business on individuals but that the imposition of such taxes may not be dischargeable in bankruptcy.