Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

"1. Held by the creditor for at least 18 months before the filing date of the Title 11 or similar case, or"

***

"Secs. 382(l)(5) and 382(l)(6): Mutually exclusive rules contained in Secs. 382(l)(5) and 382(l)(6) allow an insolvent company to preserve its NOLs. This alternate set of taxpayer-favorable limitations applies in lieu of the general Sec. 382 limitation.

A company that qualifies under Sec. 382(l)(5) can use its prechange NOLs in full, unrestricted by the Sec. 382 limitation. To qualify, the corporation:

1. Must be under the jurisdiction of a bankruptcy court immediately before the ownership change; and

2. The corporation's shareholders and "qualified creditors" (determined immediately before the ownership change) must own at least 50% (both in vote and in value) of the corporation's stock immediately after the ownership change (Secs. 382(l)(5)(A)(i) and (ii); Regs. Sec. 1.382-9).

A creditor is a qualified creditor under Regs. Sec. 1.382-9(d)(1) to the extent that the creditor is the beneficial owner of qualified indebtedness immediately before the ownership change. Qualified indebtedness is defined as the debt exchanged by the creditor if it was:

1. Held by the creditor for at least 18 months before the filing date of the Title 11 or similar case, or

2.A claim that arose in the ordinary course of the trade or business of the company before the ownership change and is held by a person who at all times held the beneficial interest in that indebtedness (Sec. 382(l)(5)(E); Regs. Sec. 1.382-9(d)(2))."

From Joycechoices link below:

http://www.thetaxadviser.com/issues/2015/may/tax-clinic-06.html#sthash.tSbVAQo7.dpuf