Cancellation of debt a key element of most restructurings generally triggers taxable income. The German tax authorities had issued an administrative decree (the "Tax Restructuring Decree" - Sanierungserlass), however, declaring that, upon the satisfaction of certain requirements and conditioned on forfeiture of any loss carry forwards, the cancellation of debt income ("CODI") would not be taxed.

A recent decision by the United States Bankruptcy Court for the Southern District of New York¹ found that a UCC-3 termination statement filed on behalf of a secured creditor was not effective because it lacked the proper authorization.