There is a likelihood that a businesses facing bankruptcy has net operating losses (NOLs).  These NOLs might be available to offset taxable income in not only current and future years but also past years to a limited extent. Understanding the value of the NOLs is relevant to a feasibility analysis in confirming a chapter 11 plan.  In addition, under stock sales, the NOLs might be able to be transferred to the purchaser.  You should consult with a tax expert to determine the impact NOLs have on your business and specific goals you seek to accomplish.

In de la Pena Stettner v. Smith (In re IFS Financial Corp.), the US Court of Appeals for the Fifth Circuit affirmed that a chapter 7 debtor’s control over certain bank accounts was sufficient to to establish de facto ownership.  Accordingly, the accounts were considered ‘property of the estate.’  A summary of the opinion and copy of opinion can be found here.

Lawyers and courts often make reference to the “joint defense privilege,” “common interest rule,” and other similar variations.  These references are to the rule of evidence that, in certain instances, allows parties and their lawyers to assert an attorney client privilege for communications with other parties and lawyers that share a similar, common interest in litigation.  On June 29, 2012, the Texas Supreme Court issued an opinion in In re XL Specialty Ins. Co., 373 S.W.3d 46 (Tex. 2012) that discusses the extension of the privilege and articulates a more precise term as being the “allied litigant doctrine.”  The case provides some guidance as to whether a Texas state court applying Texas Rules of Evidence might determine communications fall or not within the allied litigant doctrine.  The opinion can be read here.

Unlike most bankruptcy lawyers, you probably do not walk around with a Bankruptcy Code and Rules in your back pocket.  The American Bankruptcy Institute has a valuable resource for accessing the Bankruptcy Code and Rules interactively online at http://law.abi.org/