Contact: John Hartgen
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(703) 739-0800
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href='mailto:jhartgen@abiworld.org'>
color='#0000ff' size='3'>jhartgen@abiworld.org
CONGRESS
SHOULD AMEND THE BANKRUPTCY CODE TO EASE TAX LIABILITY ON ASSET SALES
PRIOR TO CONFIRMATION OF A REORGANIZATION PLAN, ACCORDING TO LATEST ABI
QUICK POLL
size='3'>September 24, 2008, Alexandria, Va.
size='3'>— A majority of respondents (54 percent) in a recent ABI
Quick Poll agreed that Congress should
legislatively overturn the Supreme Court’s
face='Times New Roman' size='3'>Piccadilly
size='3'>opinion by amending the Bankruptcy Code to ease the tax
liability on asset sales prior to the confirmation of a reorganization
plan. Thirty-eight percent of respondents
“strongly agreed” and 16 percent “somewhat
agreed” that Congress should pass legislation to amend
§1146 (a) to ease the tax
liability on asset sales pre-confirmation.
Thirty-eight percent of
respondents, however, thought that the Supreme Court’s
Piccadilly
size='3'>ruling should stand and that Congress
should not amend the Bankruptcy Code to ease the tax liability on asset
sales prior to confirmation of a reorganization plan.
size='3'>Twenty-seven percent “disagreed strongly” and 11
percent “somewhat disagreed” that Congress should
amend §1146(a) to ease
the tax liability on asset sales pre-confirmation. Seven percent of
respondents did not know or had no opinion on the
issue.
In a 7-2 decision reached
early this year, the U.S. Supreme Court repudiated a benefit often
granted to corporate debtors in sales of assets under Bankruptcy Code
§363, outside the context of a reorganization plan.
size='3'> In Florida Dept. of Revenue v. Piccadilly Cafeterias
Inc., the Court held that the exemption on
transfer taxes contained in Code §1146(a) applies only to transfers
of assets made pursuant to a reorganization plan confirmed by a
bankruptcy court.
ABI members and members
of the public were welcome to submit their response to the statement:
“Congress should legislatively overturn the Supreme
Court’s
size='3'>Piccadilly opinion by amending
section 1146(a) to ease the tax liability on asset sales
pre-confirmation.”
ABI’s Quick Poll is
posted on ABI’s home page,
href='http://www.abiworld.org/'>
size='3'>www.abiworld.org
size='3'>. ABI members and the public are invited to respond to a
question on a timely bankruptcy or insolvency issue. Visit
href='http://www.abiworld.net/quickpoll/'>
color='#0000ff' size='3'>http://www.abiworld.net/quickpoll/
to access the results of previous
ABI Quick Polls.
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ABI is the largest
multi-disciplinary, nonpartisan organization dedicated to research and
education on matters related to insolvency. ABI was founded in 1982 to
provide Congress and the public with unbiased analysis of bankruptcy
issues. The ABI membership includes nearly 11,700 attorneys,
accountants, bankers, judges, professors, lenders, turnaround
specialists and other bankruptcy professionals, providing a forum for
the exchange of ideas and information. For additional information on
ABI, visit www.abiworld.org. For additional conference information,
visit
face='Times New Roman' color='#0000ff'
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