The Court of Appeals for the Ninth Circuit recently held that section 1129(a)(10) of the Bankruptcy Code – a provision which, in effect, prohibits confirmation of a plan unless the plan has been accepted by at least one impaired class of claims – applies on “per plan” rather than a “per debtor” basis, even when the plan at issue covers multiple debtors. In re Transwest Resort Properties, Inc., 2018 WL 615431 (9th Cir. Jan. 25, 2018). The Court is the first circuit court to address the issue.

In connection with the bankruptcy of a bank holding company (the “Bank Holdco”) and its operating bank subsidiary (the “Bank”), there are often different classes of creditors competing for one tax refund.

On November 17, 2011 the IRS issued final Treasury Regulations (the “Final Regulations”) that address the tax consequences of a debtor partnership’s issuance of equity in satisfaction of a debt obligation (a “Partnership Equity-for-Debt Exchange”). The Final Regulations provide debtor partnerships, their partners and creditors with welcome clarity regarding the federal income tax consequences of such restructuring.