Bankruptcy and Restructuring

|Bankruptcy and Restructuring

Severance Pay FICA Tax Treatment May Change

October 2012 In a decision having significant impact, the Sixth Circuit ruled that payments to employees as part of a severance program are not subject to tax under the  Federal Insurance Contributions Act, or FICA.  The IRS is fighting the decision.  Employers should file protective claims before the statute of limitations runs out. The case [...]

Bankruptcy and Restructuring|

New Caution Warranted When Selling To Entities In Bankruptcy

April 2010 Most businesses assume that payments they receive from an entity in bankruptcy for post-petition transactions can be kept. A new bankruptcy case instructs those doing business with entities in bankruptcy to exercise more caution than commonly occurs. Suppliers should not make post-petition sales until their customer in bankruptcy provides a cash collateral order [...]

Bankruptcy and Restructuring|

Congressmen Harass Companies For Attempting To Comply With Health Care Law Changes

April 2010 The Patient Protection and Affordable Care Act eliminates a previous tax benefit for retiree drug benefits. Promptly after passage, a number of corporations announced accounting charges caused by the new law. The write-offs occurred because the previously-recorded liabilities were appropriately recorded net of tax, so a change in the tax law changes the [...]

Bankruptcy and Restructuring|

A Graphical Explanation Of The Financial Restructuring Process

April 2013 Troubled company restructurings are complex endeavors. To be successful, a company must fix both the challenges that caused the problem in the first place, and create revisions to the debt that accumulated from past transactions. Most companies are ill-equipped to address even one of these two problems without assistance from financial advisors experienced [...]

Bankruptcy and Restructuring|

Home Equity Lines Of Credit May Be Dischargeable Even When Borrower Lies

June 2008 Last week, Judge Leslie Tchaikovsky, a bankruptcy judge in the Northern District of California (National City Bank v. Hill, United States Bankruptcy Court, Northern District of California, Case No. A.P. 07-4106 (May 28, 2008)) issued a ruling that could have enormous impact on future lending practices and workouts in the current subprime meltdown.  [...]

Bankruptcy and Restructuring|