As the authors stated in the series email from Monday, April 27, 2020, titled “Debtor Tax Considerations of Debt Restructuring”, many businesses are already finding it difficult, if not impossible, to service their debt obligations. As a result, many businesses are seeking to modify or restructure their debt, or, in more extreme cases, to have all or a portion of their debt forgiven or discharged. As discussed therein, restructuring transactions that result in the reduction or elimination of indebtedness can give rise to income – in the nature of: (i) “cancellation of indebtedness income” (“CODI”); and/or (ii) gain (or loss) depending on a variety of facts/circumstances. As noted therein, the rules and laws that govern... Read More
To no surprise, many businesses are already finding it difficult, if not impossible, to service their debt obligations. As a result, many businesses are seeking to modify or restructure their debt, or, in more extreme cases, to have all or a portion of their debt forgiven or discharged. A couple of weeks ago we discussed the tax consequences to debtors of restructuring their debts. Today, however, we are going to highlight some of the key issues and planning opportunities for lenders (and/or holders) to consider as they face the prospect of borrowers defaulting on obligations owed to them, including the possibility of the complete worthlessness of the obligations owed to them.First, just as debtors have... Read More
Based on the number of calls I am receiving regarding debt forgiveness under the payroll protection program (“PPP”), and reviewing certain newly issued guidance by various authorities (i.e., IRS on May 1, 2020 and SBA on April 28, 2020) concerning the PPP, I have decided to provide you an update on the PPP loan. PPP Loan Forgiveness: The following is an overview of the forgiveness allowed under the PPP loan: Certain documents will be required to be submitted to the lender for forgiveness of the PPP loan amount (see Section 1106(e) of the CARES Act at https://www.congress.gov/bill/116th-congress/house-bill/748/text?q=%7B%22search%22%3A%5B%22H.R.+748%22%5D%7D&r=1&s=10, as well as, “what documentation will I be required to submit to my lender with my request for... Read More
To no surprise, many businesses are already finding it difficult, if not impossible, to service their debt obligations. As a result, many businesses are seeking to modify or restructure their debt, or, in more extreme cases, to have all or a portion of their debt forgiven or discharged. Many people are aware that restructuring transactions that results in the reduction or elimination of indebtedness can give rise to income – in the nature of: (i) “cancellation of indebtedness income” (“CODI”); and/or (ii) gain (or loss). However, most people probably don’t realize that a “mere” modification of a debt instrument (without an elimination or discharge of the applicable debt) may trigger the recognition of income. The... Read More
I hope you are all well! This is message is part of the educational program series that was started by the authors last month in order to provide you with insights relating to many of the issues that businesses and business owners may begin to face due to the downturn in the economy as a result of the COVID-19 pandemic and collapse of energy prices and the related market. Our initial email was sent to you via BCC, and thereafter the next two emails were sent by a third-party provider. Based on several of you asking about the last two emails, as apparently such large email sent by a third-party provider is caught in spam,... Read More
I hope you are all well and enjoyed the Easter holiday! This message is part of the educational program series that was started by the authors last month in order to provide you with insights relating to many of the issues that businesses and business owners may begin to face due to the downturn in the economy as a result of the COVID-19 pandemic and collapse of energy prices and the related market. We have spent the last couple weeks addressing many of the provisions and rules found in the recently enacted Federal bills and IRS pronouncements that are intended to support the near-term liquidity needs of businesses. Today, we want to begin to shift... Read More
This message is part of a series of educational emails relating to issues likely to be considered, or faced, by many businesses and business owners this year as a result of the COVID-19 pandemic and the collapse of energy prices. As previously noted, topics to be discussed as part of this series include: (a) strengthening cash positions; (b) business recapitalizations in connection with new capital infusions (i.e., third party bail outs); (c) debt capital restructurings; (d) structuring business exit/sales; and (e) estate planning opportunities. As noted last Monday, March 30, 2020, H.R. 748, the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act” was recently passed by the federal government in an attempt to... Read More
As the authors previously indicated in the email that was sent to you last Monday, March 23, 2020, we plan on providing a series of educational emails that will address certain issues likely to be relevant to businesses over the coming year as a result of the COVID-19 pandemic, including issues related to: (a) freeing up/strengthening cash positions; (b) business recapitalizations in connection with new capital infusions (i.e., third party bail outs); (c) debt capital restructurings; (d) structuring business exits/sales; and (e) estate planning opportunities. What the authors of this email did not know last Monday, was that Congress and the President were going to pass H.R. 748, the “Coronavirus Aid, Relief, and Economic Security Act”... Read More
Every Monday for the foreseeable future, involve certain tax and corporate structuring and other legal topics and advice that could be very valuable to you and/or your clients. These emails will focus principally on current economic issues and decisions that businesses throughout the State of Texas and the rest of the United States, are already facing or likely will soon begin to face, primarily as a result of:the collapse in oil prices and the ripple effect thereofthe crippling effect that the “coronavirus” is having in most sectors of the global economy.These economic forces and events are causing most people to consider many of those sayings from past generations, such as “you better save, you don’t... Read More
Mergers, Acquisitions, and Dispositions
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Phone: 903-705-1101
Fax: 903-787-5955