Lehman Brothers Financial SA (LEHNQ)

[SwissCheeseAccount]

But:

https://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=4985&context=flr

In part to prevent this harsh outcome, drafters of the Tax Code crafted special rules to apply to changes of ownership that take place pursuant to a confirmed Chapter 11 plan. These rules are quite generous, allowing a company to emerge from bankruptcy without any limitation on its future use of NOLs, and without the ordinarily applicable continuity of business enterprise requirement.To qualify for this preferential treatment, some combination of historic shareholders and creditors of the bankrupt company must receive at least 50 percent of the reorganized debtor’s equity interests in full satisfaction of their claims against the debtor.In this way, the rule permits a change of ownership of the bankrupt company, and thus an indirect transfer of its valuable tax attributes. Relying on this provision, many Chapter 11 plans contemplate that creditors will receive equity interests in the debtor in exchange for all or part of their debt claims. It is important to note, however, that to the extent a second change of ownership occurs within two years of the Chapter 11 plan, the available NOLs will be effectively reduced to zero.