WILMINGTON, Del. - As part of its preparations to emerge from Chapter 11 protection in 2014 and to receive a tax break for 2013, W.R. Grace & Co. received authorization Dec. 17 from a Delaware federal bankruptcy judge to contribute up to $250 million to a qualified settlement fund for eventual distribution to an asbestos personal injury trust (In re: W.R. Grace & Co., et al., No. 01-01139, D. Del. Bkcy.).
NEW YORK - A Second Circuit U.S. Court of Appeals panel on Dec. 17 affirmed the personal taxation of $5,528 in litigation costs against a widow who lost the first federal Zometa jaw injury trial but denied defendant Novartis Pharmaceutical Corp.'s motion to sanction the woman's attorney for misrepresenting that she was a proper representative of her husband's estate (Karlene Hogan v. Novartis Pharmaceuticals Corporation, No. 12-5085, 2nd Cir.).
ATLANTA - More than 250 Georgia cities and counties failed to prove that online travel companies (OTCs) collected excess taxes and now owe the localities back taxes, the 11th Circuit U.S. Court of Appeals ruled Dec. 13, also upholding a district court's sanctions ruling against the class of localities (City of Rome, et al. v. Hotels.com, L.P., et al., No. 12-14588, 11th Cir.; 2013 U.S. App. LEXIS 24745).
WASHINGTON, D.C. - A distributor of imported cigarettes may not claim tax deductions for unpaid obligations to the national tobacco Master Settlement Agreement (MSA), a U.S. Tax Court judge ruled Dec. 4, and is liable for back taxes totaling more than $38 million for the years 2004 and 2006 (Vidal Suriel v. Commissioner of IRS, 141 T.C. No. 16, U.S. Tax).
WASHINGTON, D.C. - In its Dec. 2 order list, the U.S. Supreme Court denied without comment two major online retailers' petitions for certiorari challenging New York's "Internet tax law," which was found to be constitutional on its face by the New York State Court of Appeals (Overstock.com Inc. v. New York State Department of Taxation and Finance, et al., No. 13-252, and Amazon.com LLC, et al. v. New York State Department of Taxation and Finance, et al., No. 13-259, U.S. Sup.).
NEW YORK - A former client of bankrupt law firm Dewey & LeBoeuf on Nov. 27 moved in the U.S. Bankruptcy Court for the Southern District of New York for permission to file a late claim on grounds that a former partner at the firm provided legal analysis related to investments for which the client is now being penalized $5.8 million by the IRS (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).
RICHMOND, Va. - A panel of the Fourth Circuit U.S. Court of Appeals on Nov. 20 affirmed a bankruptcy court's ruling that allowed a Chapter 7 trustee to sell a debtor couple's residence in order to satisfy outstanding liens on the property (Garon Reeves v. Joseph N. Callaway, No. 12-2127, Chapter 7, 4th Cir.; 2013 U.S. App. LEXIS 23358).
TRENTON, N.J. - Insureds had no reasonable expectation of coverage under their claims-made liability insurance policy for a claim brought by the Internal Revenue Service because the only exposure suffered by the insureds was a fine, penalty or tax, a New Jersey appeals panel ruled Nov. 15, affirming a lower court's ruling in favor of the insurer (William B. Kessler Memorial Hospital, Inc., et al. v. North River Insurance Co., et al., No. A-2201-12T3, N.J. Super., App. Div.; 2013 N.J. Super. Unpub. LEXIS 2756).
WILMINGTON, Del. - Bankrupt Overseas Shipholding Group Inc. (OSG) on Nov. 18 filed a legal malpractice adversary complaint in the U.S. Bankruptcy Court for the District of Delaware against the law firm that served as OSG's general outside counsel before bankruptcy, contending that it gave incorrect investment advice that cost the company "hundreds of millions" in tax payments (Overseas Shipholding Group Inc. v. Alan P. Parnes, et al. [In Re: Overseas Shipholding Group Inc.], No. 12-20000, Adv. No. 13-53492, Chapter 11, D. Del. Bkcy.).
SEATTLE - A lower court did not err in granting summary judgment dismissal to two excess insurers in an investment management company insured's lawsuit seeking excess coverage for settlements and costs stemming from its fraudulent tax shelter strategy, a Washington appeals panel found Nov. 12 (Quellos Group LLC v. Federal Insurance Co., et al., No. 68478-7-I, Wash. App., Div. 1; 2013 Wash. App. LEXIS 2626).
NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on Nov. 5 affirmed a bankruptcy court's decision that a creditor of a debtor company was not entitled to recover his $1.4 million loan to the company because the loan itself was part of a plan to establish an illegal tax shelter (Terrill J. Horton v. Walter O'Cheskey, Chapter 11 trustee, No. 12-11200, Chapter 11, 5th Cir.; 2013 U.A. App. LEXIS 22468).
WILMINGTON, Del. - Bankrupt PMGI Holdings Inc., the parent company of the adult entertainment empire carrying the name "Penthouse," on Nov. 1 filed an amended disclosure statement supporting its second amended joint plan of reorganization under which first- and second-lien noteholders would receive a combined $565,124,621.86 and all administrative and priority tax claims would be paid in full (In Re: PMGI Holdings Inc., No. 13-12404, Chapter 11, D. Del. Bkcy.).
NEW YORK - A federal judge in New York on Oct. 28 granted in part and denied in part a lead plaintiff's motion to compel a company to provide certain documents related to U.S. Securities and Exchange Commission and U.S. Department of Justice subpoenas issued seeking information related to their investigation into the company's income tax and other financial reporting (In re Weatherford International Securities Litigation, No. 11-1646, S.D. N.Y.; 2013 U.S. Dist. LEXIS 154446).
WASHINGTON, D.C. - President Obama signed a bill Oct. 17 to fund the government after the House and Senate reached an agreement Oct. 16 to end the partial government shutdown and to raise the debt ceiling without House Republicans' demands for a one-year delay of the Patient Protection and Affordable Care Act (PPACA) and to repeal a tax on medical devices being met.
BIRMINGHAM, Ala. - The county tax assessor for bankrupt Jefferson County, Ala., along with a group of elected officials, on Oct.10 filed a brief in the U.S. Bankruptcy Court for the Northern District of Alabama, contending that the county's plan of adjustment should not be approved (In Re: Jefferson County, Ala., No. 11-5736, Chapter 9, N.D. Ala. Bkcy.).
LITTLE ROCK, Ark. - The Arkansas Supreme Court on Oct. 10 affirmed certification of two classes of taxing entities in Arkansas suing online travel companies (OTCs) for allegedly failing to remit the full amount of taxes owed for online hotel bookings (Hotels.com, L.P., et al. v. Pine Bluff Advertising and Promotion Commission, et al., No. CV-13-342, Ark. Sup.; 2013 Ark. LEXIS 474).
WILMINGTON, Del. - The bankruptcy judge presiding over the Chapter 7 proceeding of Downey Financial Corp. on Oct. 8 ruled that a tax refund of more than $373 million belongs to the bankruptcy estate and cannot be claimed by the Federal Deposit Insurance Corp. (Alfred T. Giuliano, et al. v. Federal Deposit Insurance Corporation $(In Re: Downey Financial Corporation$), No. 08-13041 Adv. No. 10-53731, Chapter 7, D. Del. Bkcy.).
WASHINGTON, D.C. - The U.S. Supreme Court ruled Oct. 1 that it will hear the appeal of a lawsuit regarding whether a business that closes must pay Social Security and Medicare tax (together, FICA tax) on the severance checks its laid-off workers receive (United States v. Quality Stores, Inc., et al., No. 12-1408, U.S. Sup.; 2013 U.S. LEXIS 5128).
WASHINGTON, D.C. - The federal government partially shut down just after midnight Oct. 1 after the Democratic-controlled U.S. Senate continued to reject demands by the Republican-controlled House to impose a one-year delay of the Patient Protection and Affordable Care Act (PPACA) and to repeal a tax on medical devices as part of budget negotiations. Health care exchanges - a key component of the act - still open Oct. 1.
WASHINGTON, D.C. - The U.S. Senate will meet at 2 p.m. Sept. 30 - 10 hours before a government shutdown deadline - to decide what to do after the Republican-controlled House approved legislation yesterday imposing a one-year delay of the Patient Protection and Affordable Care Act (PPACA) and repealing a tax on medical devices in budget negotiations.
ATLANTA - The 11th Circuit U.S. Court of Appeals on Sept. 23 affirmed a lower court's ruling that a professional liability insurance policy provides a $1 million per-claim limit to cover an underlying settlement regarding an insured's negligence in tax preparations because the underlying complaint asserts only one claim (Camico Mutual Insurance Co. v. Abraham Rogozinski, et al., No. 12-15291, 11th Cir.; 2013 U.S. App. LEXIS 19460).
DENVER - A federal judge in Colorado reversed a bankruptcy court's ruling on Sept. 23, which had determined that a debtor's tax penalties assessed by the IRS were discharged when his Chapter 7 bankruptcy was discharged (Peter George Martin v. The United States of America $(In Re: Peter George Martin$), No. 12-03380, Chapter 7, D. Colo.; 2013 U.S. Dist. LEXIS 135702).
ATLANTA - Bankrupt Bankunited Financial Corp. on Sept. 4 filed a petition for rehearing en banc in the 11th Circuit U.S. Court of Appeals, contending that the appellate panel wrongly ruled that the Federal Deposit Insurance Corp. had rights to a $50 million tax refund because it didn't belong to the bankruptcy estate. Bankunited argues that en banc review is warranted because the appellate panel's ruling conflicts with precedent and the Bankruptcy Code (Bankunited Financial Group v. Federal Deposit Insurance Corporation $(In Re: Bankunited Financial Group$), No. 12-11392, Chapter 11, 11th Cir.).
DETROIT - The bankrupt City of Detroit on Sept. 3 moved in the U.S. Bankruptcy Court for the Eastern District of Michigan for authorization to direct city officials to release information regarding potential tax creditors and seeking approval to file that information under seal (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).
NEW YORK - A lump-sum payment by a plaintiff's former employer in exchange for the plaintiff agreeing to withdraw his complaint qualifies as wages under the Federal Insurance Contributions Act (FICA) and is subject to FICA taxes, the Second Circuit U.S. Court of Appeals ruled Aug. 27 (Chester Gerstenbluth v. Credit Suisse Securities $(USA$) LLC, et al., No. 12-4125, 2nd Cir.; 2013 U.S. App. LEXIS 17841).