Jun 4, 2020

Tax Consequences of Deferring or Restructuring Payments

Loans

During the current economic downturn arising from the COVID 19 pandemic, many businesses are struggling with payments to lenders, landlords and contractors.  This SGR Tax Blog posting addresses the tax consequences to each party when a payment is deferred or renegotiated. While the tax consequences of such are frequently not foremost in the minds of debtors, they often drive decisions on the creditor side.  Accordingly, even for debtors an overview of these rules can help explain positions taken by creditors. The tax rules on debt instruments (“DI’s”) are more complicated and we address them first.  Leases and other arrangements are… Read more


May 28, 2020

Almost As Certainly As Night Follows Day: “Preference” Proceedings Follow Bankruptcy

Bankruptcy Claim

The recent pandemic-induced spike of bankruptcy filings by major retail apparel chains will likely lead to a flood of “preference” proceedings in which attempts will be made to “clawback” payments to vendors. A preference is a payment to a creditor in the days leading up to a bankruptcy by which a creditor was improperly preferred over others. When this happens, the Bankruptcy Code allows the trustee (and sometimes others) to bring a preference action to recover the preferential payments for the benefit of the debtor’s estate. The Bankruptcy Code defines a preferential payment as any payment for a debt made… Read more



Feb 4, 2020

What’s In a Name? (Part 2): Tax and Other Consequences Caused by Joint Ownership of Real Property

Estate Tax

In an earlier article we posted entitled “What’s in a Name? (Part 1),” we set forth the various possible ways that assets can be titled. Titling controls how an asset that you own will be distributed upon your death.  If you own an asset in your individual name, this asset will most likely be distributed through the terms of your Will through the court process called probate, or if you die without a Will, through the process known as administration.  If you own an asset that permits you to designate a beneficiary, such as a retirement account, that designation controls… Read more


Jan 7, 2020

Plaintiffs Beware: You May Have Less Time Than You Think to Bring a FDCPA Claim

Blog_FDCPA Claim

In a recent 8-1 decision, the United States Supreme Court resolved a circuit split in favor of debt collectors. Rotkiske v. Klemm[1] (Rotkiske III). Mr. Rotkiske brought suit on June 29, 2015 against Klemm & Associates (Klemm) for violation of the Fair Debt Collection Practices Act (FDCPA). Id. at *2. In September 2014, Mr. Rotkiske applied for a mortgage and learned that Klemm had an outstanding $1,500 default judgment against him. Id. In 2008, Klemm attempted service at Mr. Rotkiske’s previous address and learned that Mr. Rotkiske no longer lived there. Id. Klemm dropped the suit for failure to serve… Read more