On 5 May 2017, a day after the recent Banking Regulation (Amendment) Ordinance, 2017 (Ordinance) received Presidential assent, the Reserve Bank of India (RBI) issued a circular on ‘Timelines for Stressed Assets Resolution’ (Circular). The Circular amends the existing “Framework for Revitalising Distressed Assets in the Economy – Guidelines on JLF and CAP” dated 26 February 2014 (JLF Framework) and mandates members of a joint lenders forum (JLF) to follow strict timelines in implementing the corrective action plan (CAP) or suffer penal consequences for non-compliance.

Section 382 limits a loss corporation’s ability to use its Net Operating Losses (NOLs) carryforwards following an "ownership change."¹ An ownership change is triggered if one or more "5-percent shareholders" of the loss corporation increase their ownership in the aggregate by more than 50 percentage points during a testing period. Following an ownership change, the "Section 382 limitation" generally reduces the ability to use NOLs to offset taxable income in any post-change year.²

On April 20, 2011, the IRS issued proposed regulations under Treas. Reg. §1.267(f)-1(c) (the Proposed Regulations), which will become effective after they are adopted as final regulations. The Proposed Regulations modify the current deferred loss rules to allow the acceleration of a deferred loss in certain circumstances that routinely arise in international restructurings of U.S. companies. Accordingly, corporations in a controlled group that are considering a sale to another member of the controlled group should evaluate the consequences under the Proposed Regulations.