The U.S. Bankruptcy Court for the Southern District of New York issued a decision earlier this year that is likely to have a significant impact on bankruptcy sales of property. In In re New 118th, Inc., 398 B.R. 791 (Bankr. S.D.N.Y. 2009), the court held that certain tax exemptions available pursuant to section 1146(a) of the Bankruptcy Code in connection with transfers of property that occur "under a plan," apply to pre-confirmation sales that close after confirmation and are necessary to the consummation of the debtor's plan.

There is something for everyone in the suitably named Worker, Homeownership, and Business Assistance Act of 2009–including potential recoveries for unsecured creditors of a debtor reorganizing or liquidating pursuant to the United States Bankruptcy Code.

Background

A recent decision provides new support for excluding a broad range of severance pay from FICA taxes—a position undercut by the taxpayer’s loss in CSX Corp. v. United States, 518 F.3d 1328 (Fed. Cir. 2008). United States v. Quality Stores Inc., (W.D. Mich., Feb. 23, 2010), affirms a bankruptcy court’s conclusion that, contrary to Revenue Ruling 90-72, 1990-2 C.B.

A newly released IRS letter ruling (PLR 201006003, Oct. 28, 2009) provides guidance on how a consolidated return group may obtain an ordinary loss deduction in liquidating an insolvent subsidiary. Although a write-off of worthless stock generally produces a capital loss deduction, Code Section 165(g)(3) converts these losses to ordinary deductions when they arise from a write-off of stock of an affiliated corporation.

2006 FICA Refund Claims Due April 15, 2010

Welcome to the first issue of Insolvency Matters, our round-up of recent legal developments affecting insolvency and restructuring.

Case round-up

Ever since unpaid taxes due to HMRC were “crammed down” pursuant to a restructuring plan that it voted against but did not actively oppose in Houst,¹ HMRC has challenged restructuring plans and asserted its interests more aggressively, causing the failure of restructuring plans inNasmyth

The Supreme Court’s landmark decision in Sequana¹leaves many unanswered questions, and finding a common thread between the four quite separate judgments has proved challenging for practitioners and directors alike. The recent decision in Hunt v.

In recent months, there have been a few changes regarding MVLs, which we set out below as a helpful reminder to practitioners.

Statements of Solvency

Copies Only

S89 of the Insolvency Act 1986 sets out the requirements for a statutory declaration of solvency where it is proposed that a company is wound up on a solvent basis.

Background