On September 9, 2019, the Treasury Department and IRS issued new proposed regulations (REG-125710-18) (the “Proposed Regulations”) affecting how companies with net operating losses (“NOLs” and such entities, “Loss Companies”) will calculate the ability to use such losses following an ownership change in the wake of the Tax Cuts and Jobs Act, P.L. 115-97 (2017) (“TCJA”).

For creditors in bankruptcy proceedings, as with many things in life, priority is everything.  It is often the case that a person filing for bankruptcy has insufficient funds to pay in full all of his or her creditors.  As a result, creditors try to establish their priority so they are more likely to get paid before the money runs out.  Section 507 of the Bankruptcy Code provides rules explaining the order in which expenses and claims have priority in bankruptcy.  Notably, Section 507(a)(8) provides the IRS with priority treatment in bankruptcy with respect to claims for

In the wake of Sears’ pending Chapter 11 proceeding, the company has initially sought court approval to close approximately 234 stores across the U.S., including branded locations of Sears and Kmart (which merged with Sears in 2005 in a prior bankruptcy). Those stores include approximately five in Wisconsin, 11 in Illinois, four in Colorado, four in North Carolina, and five in Utah – all states in which Michael Best has offices. The Bankruptcy Court for the Southern District of New York is set to hear the matter on November 15, 2018.

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.

While business bankruptcies have hit historic lows since the Great Recession, market developments and changes in the legal landscape suggest these numbers are due to rise. First, the statistics: The Administrative Office of the U.S. Courts (AOUSC) reports that a total of 789,020 bankruptcies were filed during the 12-month period ending December 31, 2017. Of that number, 23,157 were business bankruptcy filings.

The Tax Cuts and Jobs Act signed into law on December 22, 2017, amended the Internal Revenue Code of 1986 (IRC) and made significant changes to the treatment of individual and corporate taxpayers beginning January 1, 2018. While many understand that the overall corporate tax rate is going down, the specific effects of this tax reform on distressed companies, debtors, creditors, and lenders are still being uncovered. Practical Law asked Patrick M. Cox of Baker McKenzie LLP to discuss his views on the Tax Cuts and Jobs Act (TCJA) and its potential impact on the Chapter 11 process.

On Friday, March 27, 2020, the U.S. House of Representatives voted to approve the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) submitted by the Senate and President Trump just signed the bill. The bill provides for $2.2 trillion in emergency aid to ease the financial impact of the COVID-19 crisis.

The Tax Cuts and Jobs Act signed into law on December 22, 2017, amended the Internal Revenue Code of 1986 (IRC) and made significant changes to the treatment of individual and corporate taxpayers beginning January 1, 2018. While many understand that the overall corporate tax rate is going down, the specific effects of this tax reform on distressed companies, debtors, creditors, and lenders are still being uncovered. Practical Law asked Patrick M. Cox of Baker McKenzie LLP to discuss his views on the Tax Cuts and Jobs Act (TCJA) and its potential impact on the Chapter 11 process.