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Category Archives: Tax

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Third Circuit Holds That Tax-Sharing Arrangement Creates a Debtor-Creditor Relationship

Posted in Tax, Third Circuit
Continuing a string of decisions interpreting tax-sharing arrangements, the Third Circuit recently held that under California law, a tax-sharing arrangement unambiguously created a debtor-creditor relationship and did not create an agency relationship or a trust relationship.  At issue in In re Downey Financial Corp.  2015 WL 307013  (C.A.3 (Del.),2015) was the division of over $370… Continue Reading

Sixth Circuit Decision Reinforces Need for Clear-Cut Bankruptcy Provisions in Tax-Sharing Agreements

Posted in Sixth Circuit, Tax
Courts have continued to rule on the appropriate treatment in bankruptcy of a tax refund pursuant to a tax-sharing agreement (TSA) that is silent on how the refund should be treated in a bankruptcy proceeding.  In the most recent case, FDIC v. AmFin Financial Corp. et al., the 6th Circuit reversed a district court ruling… Continue Reading

In Split from Eleventh Circuit, Ninth Circuit Holds That a Tax-Sharing Agreement Constitutes a Debtor-Creditor Relationship

Posted in Eleventh Circuit, Ninth Circuit, Tax
In a follow-up to our post on the treatment of tax-sharing arrangements in bankruptcy, the Ninth Circuit held last month in an unpublished decision that a rebate that a holding company received pursuant to an ambiguous tax-sharing agreement (“TSA”) created a debtor-creditor relationship between the holding company and its banking subsidiary.  In the Matter of:… Continue Reading

Tax Sharing Arrangements in Bankruptcy: Who’s Refund Is It?

Posted in Chapter 11, Eleventh Circuit, Tax
When a multi-national conglomerate corporation fails, how the corporation’s tax-sharing arrangements (“TSAs”) will be interpreted in bankruptcy can be a multi-million dollar question, especially where a holding company is being reorganized separately from a subsidiary.  If the TSA is deemed to create debtor-creditor relationships between the affiliates, the affiliate holding the rebate on the date… Continue Reading