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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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Seventh Circuit Applies Safe Harbor to Private Securities Transaction
By Michael L. Cook
“… [T]he term ‘securities contract’ as used in [Bankruptcy Code] §546(e) unambiguously includes contracts involving privately held securities,” The Seventh Circuit held in Petr v. BMO Harris Bank, N.A.
By Lawrence J. Kotler and Elisa Hyder
In Lafferty v. Off-Spec Solutions, the U.S. Bankruptcy Appellate Panel of the Ninth Circuit held that the discharge exceptions under Section 523(a) do not apply to corporate debtors under Subchapter V of Chapter 11 of the Bankruptcy Code.
Merchant Cash Advances Could Be More Trouble Than They’re Worth
By Joseph Pack and Jessey Krehl
As small-business owners have continued to struggle in an uncertain economy, a growing number have begun the dangerous practice of relying on merchant cash advances — essentially seeking financial shelter in a lion’s den.
Biotech Industry Bankruptcy Case Update: ‘Zymergen’ and ‘Humanigen’
By Edward E. Neiger, Marianna Udem and Joo Hee Park
This Bankruptcy Case Update focuses on the recent biotech industry bankruptcy cases of Zymergen and Humanigen.