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Federal courts should “turn to state law to resolve” a “fight over a tax refund,” held a unanimous U.S. Supreme Court in Rodriquez v. FDIC (In re United W Bancorp., Inc.)
Federal courts should “turn to state law to resolve” a “fight over a tax refund,” held a unanimous U.S. Supreme Court on Feb. 25, 2020. Rodriquez v. FDIC (In re United W Bancorp., Inc.), 589 U.S. ___, 2020 WL 889191 (Feb. 25, 2020). Vacating a Tenth Circuit decision, the Supreme Court remanded the case for the lower court to apply state law in resolving “the distribution of a consolidated corporate tax refund.” The bankruptcy trustee of a bank holding company was litigating against the Federal Deposit Insurance Corporation (FDIC), as receiver for the subsidiary bank that had incurred losses generating the refund. According the Supreme Court, it was not deciding “[w]ho is right about all this ….” Id. at 4. Instead, the Court rejected the Tenth Circuit’s application of the Ninth Circuit’s so‑called Bob Richards rule. In re Bob Richards Chrysler‑Plymouth Corp., 473 F.2d 262, 265 (9th Cir. 1973) (in absence of tax allocation agreement, refund belongs to group member responsible for losses that led to it). In so doing, the Supreme Court rejected the Bob Richards rule as inappropriate federal “common lawmaking.”
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By Hugh McDonald and Deborah Kovsky-Apap
The COVID-19 pandemic is already leaving its mark on the bankruptcy asset sale landscape. Despite the uncertainty — or even because of it — bankruptcy should still be viewed as a useful tool to effectuate the acquisition of assets. The current situation and anticipated distress across many industries presents opportunities for purchasers to acquire assets on favorable terms.
By Joseph H. Lemkin
With Uncertainty As to When the Pandemic Will Ease, Bankruptcy Courts Do Not Seem to Be a Panacea Leading to Successful Reorganizations or Orderly Liquidations for Troubled Companies
The impact of COVID-19 on efforts of businesses to reorganize or even orderly liquidate in bankruptcy has been swift and devastating
By Samantha Stokes
Law firms have always counted on bankruptcy as a countercyclical practice in hard times. Now, those that prepared when the economy was booming may be about to get their reward.
By Rudolph J. Di Massa Jr. and Drew S. McGehrin
The ruling in In re Jarvis that the grant of a security interest to a corporate lender will not necessarily “spread” that security interest to the lender’s affiliates underscores the need for precision and care in the drafting of loan documents, particularly with respect to the granting language contained in security agreements.