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Add the Western District of New York to those courts holding that in rem tax foreclosures are not presumed to provide reasonably equivalent value to a debtor. In Canandaigua Land Development LLC v. County of Ontario (In re Canandaigua Land Dev. LLC), 521 B.R. 457 (Bankr. W.D.N.Y. 2014), the court granted summary judgment for a debtor whose land had been foreclosed for tax arrearages, holding that the in rem foreclosure was a constructively fraudulent transfer and ordering the county to convey the foreclosed land back to the debtor.
[1]A trustee for a bankrupt entity or a debtor has the power to bring an action to avoid and recover constructive or actual fraudulent transfers. Section 544(b) of the Bankruptcy Code specifically allows a trustee or debtor to step into the shoes of an actual creditor of the debtor, who could have avoided the transfer outside of bankruptcy using state law. The U.S. Court of Appeals for the Seventh Circuit recently analyzed a debtor’s power to bring a state law fraudulent-transfer action..
A 30-year friendship and business association between Charles Pircher and Wren Alexander ultimately cost one of Alexander’s companies, Wren Alexander Investments, L.L.C. (Wren LLC), its interest in certain real property in Medina County, Texas (Medina Property). On June 14, 2013, in a per curiam opinion, In re Wren Alexander Investments, LLC,[1] the U.S. Court of Appeals for the Fifth Circuit affirmed the affirmation of the U.S. District Court for the Western District of Texas of the allowance by the U.S.
When a bank fails and is liquidated by the Federal Deposit Insurance Corporation (FDIC), and then the bank’s holding company files for bankruptcy, a dispute frequently arises regarding ownership of tax refunds issued to a consolidated group (including the bank and the bank holding company) pursuant to consolidated tax returns. The parties to the dispute typically are the FDIC (derivatively through the failed bank) and the holding company’s bankruptcy estate.
In line with one of bankruptcy’s vaunted goals, providing debtors with a fresh start, the Bankruptcy Code specifically authorizes debtors to exempt retirement funds held in a compliant retirement account from property of the estate. When done properly, investing funds in a compliant profit-sharing plan can be a powerful financial-planning and asset-protection tool, putting almost unlimited funds out of creditors’ reach.
When do state income taxes become “payable” to taxing authorities for purposes of chapter 13 bankruptcy? Disagreeing with the Fifth Circuit, the Ninth Circuit Court of Appeals adopted a liberal view and held that taxes become due when they are “capable of being paid” in the recent case of Joye v.
The question of whether a debtor can obtain an exemption under 11 U.S.C. § 1146(a) from having to pay stamp or similar tax in a pre-confirmation asset transfer was decisively answered in the negative by the U.S.
