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Continuity Of Business Requirements For N.O.L.S. In Bankruptcy: The Economic Effects Of 1.269-3(D), Terrence R. Chorvat
Continuity Of Business Requirements For N.O.L.S. In Bankruptcy: The Economic Effects Of 1.269-3(D), Terrence R. Chorvat
Cleveland State Law Review
This paper focuses on the use of carryforwards in a bankruptcy situation. In particular it examines the economic implications of Treasury Regulation § 1.269-3(d), which was finalized on January 6, 1992. This regulation creates a presumption that if the acquirer of a loss corporation does not continue the corporation's business, the transaction was consummated for tax avoidance purposes. Therefore under § 269, which limits use of NOLs after an acquisition, the loss corporation's NOLs cannot be used by the acquirer. This presumption, however, can be overcome by strong evidence that other motives controlled the decision.
The Rehnquist Court, Strict Statutory Construction And The Bankruptcy Code, Carlos J. Cuevas
The Rehnquist Court, Strict Statutory Construction And The Bankruptcy Code, Carlos J. Cuevas
Cleveland State Law Review
This article analyzes the Rehnquist Court's use of strict statutory construction. It will argue that strict statutory construction can be justified under public choice and agency theories of statutory interpretation, and that strict construction promotes the implementation of bankruptcy policy. Strict statutory construction, moreover, is beneficial because it produces reliability and predictability, which is essential to our dynamic economy. The use of strict statutory construction precludes a court from relying on legislative history to manufacture the result that the court thinks is the best solution to the problem. Another justification for strict statutory construction is that it prevents bankruptcy judges …
Continuity Of Business Requirements For N.O.L.S. In Bankruptcy: The Economic Effects Of 1.269-3(D), Terrence R. Chorvat
Continuity Of Business Requirements For N.O.L.S. In Bankruptcy: The Economic Effects Of 1.269-3(D), Terrence R. Chorvat
Cleveland State Law Review
This paper focuses on the use of carryforwards in a bankruptcy situation. In particular it examines the economic implications of Treasury Regulation § 1.269-3(d), which was finalized on January 6, 1992. This regulation creates a presumption that if the acquirer of a loss corporation does not continue the corporation's business, the transaction was consummated for tax avoidance purposes. Therefore under § 269, which limits use of NOLs after an acquisition, the loss corporation's NOLs cannot be used by the acquirer. This presumption, however, can be overcome by strong evidence that other motives controlled the decision.