Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Bankruptcy StrategistFeaturesKickerLJN NewslettersNewsSections

Secured Lender Primes Earlier Federal Tax Lien

By Michael L. Cook

The U.S. Court of Appeals for the Fourth Circuit, on Oct. 31, 2014, held in a split decision that a lender's unrecorded lien primed an earlier unrecorded federal tax lien on a Chapter 11 debtor's real property. In re Restivo Auto Body, Inc., 2014 WL 5488166 (4th Cir. Oct. 31, 2014) (2-1). Relying on “Maryland['s] common law ' doctrine of equitable conversion,” the court reasoned that the lender was entitled “to the same protections as a [good faith] purchaser for value who takes title free and clear of all subsequent liens regardless of recordation.” Id. at *2. The dissent, however, argued that federal law governs “the priority of federal tax liens”; the debtor taxpayer had no “unencumbered title to ' give” the lender; and that the majority erred by applying “state law to determine the priority of the IRS's tax lien to the property,” an issue to be “determined solely by federal law.” Id. The Restivo case reassures secured lenders unaware of a borrower's preexisting tax lien, however, as it protects them against the government's nondisclosure.

Relevance of the Case

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Beach Boys Songs Written Decades Ago Triggered Current Quarrel With Lawyers Image

There's current litigation in the ongoing Beach Boys litigation saga. A lawsuit filed in 2019 against Nevada residents Mike Love and his wife Jacquelyne in the U.S. District Court for the District of Nevada that alleges inaccurate payment by the Loves under the retainer agreement and seeks $84.5 million in damages.

Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

Transfer Tax Implications on Real Property Leases Image

The real property transfer tax does not apply to all leases, and understanding the tax rules of the applicable jurisdiction can allow parties to plan ahead to avoid unnecessary tax liability.