In December 2017, Congress passed and President Trump signed the Tax Cuts and Job Act of 2017 (TCJA). Effective as of Jan. 1, 2018, the TCJA is a wide-ranging change to the Internal Revenue Code of 1986 (the Tax Code) affecting individual, corporate, and international taxation.

Lost amongst the many commentaries are two changes that have a negative impact on business debtors under the Bankruptcy Code: (1) reduction of the corporate tax rates and (2) elimination of the ability to carry back net operating losses.

I sense a sea change in the recent Delaware decision in Intervention Energy Holdings, LLC, 2016 WL 3185576 (6/3/16), refusing to enforce a bankruptcy proofing provision of a Delaware LLC’s operating agreement. Until recently, the trend had been to accept the fundamental principles of bankruptcy remoteness, although courts sometimes found ways to avoid honoring anti-bankruptcy devices in specific cases.

In a recent split decision, a 2-1 majority for the United States Court of Appeals for the Third Circuit ruled that a debtor’s plan of reorganization that proposes a sale of assets free and clear of liens is not necessarily required to allow creditors whose loans are secured by those assets to credit bid at the sale. The majority decision in In re Philadelphia Newspapers, LLC, Nos. 09-4266, 09-4349, 2010 WL 1006647 (3d Cir. Mar. 22, 2010), which follows a similar decision from the United States Court of Appeals for the Fifth Circuit (see Bank of N.Y. Trust Co., NA v.

LLC members and other persons dealing with LLCs will be interested in a recent Florida Supreme Court case that was decided on June 24, 2010. The court’s decision in Olmstead v. FTC appears to eliminate part of the asset protection feature of single-member LLCs and calls into question the remedies available to creditors of members in multiple-member LLCs.

The current "Great Recession," which began in late 2007 with a maelstrom in the debt capital markets, has necessitated a rethinking of the federal income tax rules governing debt restructurings. The harsh rules2 promulgated by the Internal Revenue Service (IRS) in reaction to the 1991 taxpayer-favorable decision in Cottage Savings v. Commissioner,3 have been inhibiting restructurings. Instead, rules that did not trigger adverse tax results have been needed to induce lenders and borrowers to restructure obligations that can no longer be paid according to their terms.

On February 7, 2011, in In re DBSD North America, Inc.,1 the Court of Appeals for the Second Circuit released its opinion joining the Third Circuit in condemning socalled “gifting plans,” thus deepening the perceived circuit split with the First Circuit which has been interpreted as approving of gifting plans. In so doing, the Second Circuit relied on the U.S. Supreme Court cases of Bank of Am. Nat’l Trust & Sav. Ass’n v. 203 N. LaSalle St. P’ship2 and Norwest Bank Worthington v.

On April 26, 2011, the Supreme Court of the United States adopted amended Federal Rule of Bankruptcy Procedure 2019 (“Rule 2019”). Rule 2019 governs disclosure requirements for groups and committees that consist of or represent multiple creditors or equity security holders, as well as lawyers and other entities that represent multiple creditors or equity security holders, acting in concert in a chapter 9 or chapter 11 bankruptcy case.

As revealed in a recent bankruptcy case, purchasers of contaminated property need to have a very clear understanding of their contractual remedies before proceeding with self-help. The case (In re Evans Industries, Inc., No.

In a decision that may create serious problems for bankruptcy case administration, the Supreme Court this morning invalidated part of the Bankruptcy Court jurisdictional scheme. Stern v. Marshall, No. 10-179, 564 U.S. ___ (June 23, 2011). Specifically, the Court held that the Bankruptcy Courts cannot issue final judgments on garden variety state law claims that are asserted as counterclaims by the debtor or trustee against creditors who have filed proofs of claim in the bankruptcy case.

On June 28, 2011, the Court of Appeals for the Seventh Circuit rejected the views of the Third Circuit and the Fifth Circuit and held that a reorganization plan which proposes the sale of encumbered assets free and clear of liens must honor the secured creditor’s right to credit bid its claim in order to be confirmed under the “fair and equitable” standard of the Bankruptcy Code. In the combined appeals of In re River Road Hotel Partners, LLC, et al. andIn re Radlax Gateway Hotel, LLC, et al.