Bird, Svendsen, Brothers, Scheske & Pattison, P.C.’s Law Blog
I’m still wading through my materials regarding The American Recovery and Reinvestment Act of 2009. If I run across stuff that the mainstream sources are missing, I’ll post it here (like the short-window on the new 5-year NOL provision), but for now, I’ll simply note that the new Act makes over 300 changes to the Internal Revenue Code, including many relief provisions for individuals and businesses . . . many of which are retroactive to January 1, 2009.
Drunkards rejoice!
$24,162,000 VERDICT – Inebriated plaintiff tenant trips on door saddle of his apartment building as he is exiting – Plaintiff loses his balance and falls nine feet over two foot wall to his right – Displaced cervical fractures – Paraplegia – Double incontinence
In this action, the then 33-year-old plaintiff contended that the defendant, his landlord, negligently failed to repair an elevated door saddle despite both constructive and actual notice received from a different tenant some three months earlier who complained about the saddle and malfunctioning locks. The plaintiff contended that as a result, he tripped as he was exiting and fell to his right over a two foot high wall, landing nine feet below. The plaintiff suffered displaced cervical fractures that left him a paraplegic with double incontinence. The defendant denied receiving any notice about the alleged defect. The defendant also contended that any defect was minimal in nature and that the sole cause of the incident was the negligence of the plaintiff, who had a BAC of almost .30 at the time of the late Sunday morning incident. This was more than three in a-half times the legal definition for driving while intoxicated.
If you’re buying U.S. savings bonds (series I, EE) for a young person’s education, the interest on the bonds is not only tax-deferred, it’s never taxable, if (i) the beneficiary uses the bonds for qualified education expenses, and (ii) the bonds are registered in the name of the young person’s parent(s).
I’m not an investment adviser (and always disclaim any investment advice I give), so why the investment advice? Answer: There’s a lot of overlap between investing and estate planning. Last year, for instance, the Michigan Institute of Continuing Legal Education sponsored a seminar dedicated solely to 529 Plans. The seminar materials were hundreds of pages thick. I can’t say I read all of ‘em, but the quick browse was helpful.
Tax laws disrupting the natural workings of the market . . . or the market conforming to the artificial curves of the tax laws? You decide:
Some investors are baffled why media titans John Malone and Charles Ergen are competing to throw money at Sirius XM Radio Inc., the money-losing satellite-radio company that was perilously close to bankruptcy.
But in fact, the company’s most valuable asset could be precisely all the money it has lost.
Sirius XM has at least $6 billion of tax losses, according to securities filings. That means that the losses it has accumulated over the years can be used as deductions to cut taxes on future profits.
Link.
I wonder if that new tax provision (see immediately below) might increase the interest in Sirius. The buyer might be able to take immediate advantage of the losses . . . though the buyer will have to deal with the limitations imposed by IRC S 381.
The American Recovery and Reinvestment Act of 2009 (a/k/a “The Stimulus Bill” and “Government Run Amok Bill”) appears to have a one-time election to carry back losses five years, but the election must be made within the next sixty days. If you’re sitting on NOLs, you may want to check this out.
What’s your blended tax rate? You probably know your top tax rate, but your entire income isn’t taxed at that rate. Your actual rate is lower. To figure it out, check out this calculator.
So, The Peanut Company has filed bankruptcy. Will it stop the lawsuits and criminal investigations? Probably not, but it will throw a monkey wrench into things.
The automatic stay will go into effect immediately, but the stay only stops actions against the company, not the individual officers who allegedly directed the release of rodent-feces-tainted peanuts to the public. And even if the officers file for bankruptcy, the automatic stay will not stop criminal actions against them:
The filing of a petition under section 301, 302, or 303 of this title, or of an application under section 5(a)(3) of the Securities Investor Protection Act of 1970, does not operate as a stay -
(1) under subsection (a) of this section, of the commencement or continuation of a criminal action or proceeding against the debtor.
It’s also highly questionable whether the company or its officers can get a discharge in bankruptcy (a “discharge” is the court’s removal of one’s debts, so the debtor can get a clean start): If a bankruptcy court finds that there is a pending case in which a debtor may be found guilty of any criminal act, intentional tort, or willful or reckless misconduct that causes serious physical injury or death to another in the preceding five years, then a debtor is not eligible for a discharge in bankruptcy.
Finally, even if the debtor can get a general discharge, particular claims may not be discharged. Claims based on criminal acts and fraud, for instance, usually are not dischargeable.
I get this question a lot: Which offers more liability protection, corporations or limited liability companies? The answer: They’re equal. That was the intent of the Michigan legislature, and the courts appear to be enforcing it. See, for example, Waun v Universal Coin Laundry Machine, LLC and Stephen M. Bean and Frederic M. Bean, 2006 Mich App LEXIS 2821 (Sept. 26, 2006).
IRS problems? The way I see it, you have six options:
1.Pay it
2. Propose an installment plan (IRS Form 9465)
3. Propose an Offer in Compromise under Section 7122 of the Internal Revenue Code
4. Propose a Partial-Payment Installment Agreement
5. Ask the IRS to cease current collection actitivies (see IRS Form 433-F)
6. File bankruptcy.
