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Intersport Fashions West, Inc. v. United States

Intersport Fashions West, Inc. v. United States

United States Court of Federal Claims

February 13, 2012, E-Filed

No. 07-739 T

Opinion

 [*397]  OPINION AND ORDER

HEWITT, Chief Judge

Before the court are the Motion of the United States for Summary Judgment and Brief in Support Thereof (defendant's Motion or Def.'s Mot.), Docket Number (Dkt. No.) 25, filed March 6, 2009, to which defendant attached Defendant's Proposed Findings of Uncontroverted Fact (defendant's  [**2] Proposed Facts), Dkt. No. 26, filed March 6, 2009; the Brief of Intersport Fashions West, Inc. in Opposition to the Motion of the United States for Summary Judgment (plaintiff's Response or Pl.'s Resp.), Dkt. No. 47, filed November 16, 2011, to which plaintiff attached Plaintiff's Proposed Findings of Uncontroverted Facts in Support of Its Opposition to the Motion of the United States for Summary Judgment (plaintiff's Proposed Facts), Dkt. No. 45, filed November 16, 2011, and Plaintiff's Response to the United States' Proposed Findings of Fact (plaintiff's Response to Defendant's Proposed Facts or Pl.'s Resp. Facts), Dkt. No. 46, filed November 16, 2011; and the Reply Brief of the United States in Support of Its Motion for Summary Judgment (defendant's Reply or Def.'s Reply), Dkt. No. 52, filed December 15, 2011.

For the following reasons, defendant's Motion is GRANTED.

 [*398]  I. Background2

A. Factual Background

This  [**3] action concerns a claim for a refund of corporate tax to a controlled company stemming from restructuring expenses that had been incurred by its parent company.

Plaintiff Intersport Fashions West, Inc. (plaintiff or Intersport) is an American corporation that designed and distributed motorcycle apparel in the United States. Def.'s Mot. Ex. 2 (Plaintiff's Supplemental Response to Interrogatories) 1233 ("[Intersport] designed motorcycle apparel and distributed products to wholesalers under third-party brands or brands of sister companies . . . ."). Intersport was purchased by a publicly traded German company, Eurobike Aktlengesellschaft (Eurobike), in 1999, Deposition of John L. Flynn (Flynn Dep.) 14:8-17, 19:8-13; Pl.'s Resp. Facts 2, and between 1999 and 2003 Intersport was wholly owned by Eurobike, Pl.'s Resp. Facts 2.4

Around 1999, Eurobike borrowed heavily to acquire two wholesale motorcycle apparel companies, Schuh and DIFI. See Flynn Dep. 24:4-26:11. "Eurobike thought that they would have the wholesalers engaged in the distribution of motorcycle apparel . . . ." Id. at 24:17-19. Unfortunately for Eurobike, these wholesale businesses also sold their apparel to retailers that competed directly with some of Eurobike's retail subsidiaries. Id. at 24:22-25:4. Eurobike sold its wholesale apparel companies by 2001, but it continued to carry a sizeable debt of approximately 140 million euros related primarily to its prior wholesale acquisitions. See id. at 25:5-26:11.

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103 Fed. Cl. 396 *; 2012 U.S. Claims LEXIS 56 **; 109 A.F.T.R.2d (RIA) 2012-927

INTERSPORT FASHIONS WEST, INC., Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant.

Subsequent History: Motion granted by Intersport Fashions W., Inc. v. United States, 2012 U.S. App. LEXIS 17985 (Fed. Cir., Aug. 23, 2012)

Prior History: Intersport Fashions West, Inc. v. United States, 84 Fed. Cl. 454, 2008 U.S. Claims LEXIS 313 (2008)

CORE TERMS

taxpayer, amended return, tax return, tax year, allocations, regulations, untimely, deductions, taxable income, summary judgment, transactions, decrease, original return, refund claim, disallowance, determines, refund, audit, taxes, treasury regulation, argues, doctrine of substantial compliance, reflect income, restructuring, wholesale, apparel, genuine, summary judgment motion, management fees, defense motion

Governments, Courts, Courts of Claims, Civil Procedure, Subject Matter Jurisdiction, Jurisdiction Over Actions, Concurrent Jurisdiction, Tax Law, Tax Credits & Liabilities, Credits, Overassessments & Refunds, Credit & Refund Authority, Limitations, Civil Actions for Refunds, Summary Judgment, Entitlement as Matter of Law, General Overview, Burdens of Proof, Movant Persuasion & Proof, Judgments, Evidentiary Considerations, Tax Accounting, Allocations of Deductions & Income, Power to Allocate, Comparable Uncontrolled Price Method, Business & Corporate Law, Closely Held Corporations, Valuation, Substance Over Form Doctrine, Accrual Method, Taxable Year of Deduction