Category Archives: Tax Issues

Delaware Bankruptcy Court Considers Scope of Section 505(a) of the Bankruptcy Code

Securing a determination of a debtor’s tax liability is an issue that frequently vexes debtors in possession and trustees during the reorganization process. While section 505(a) of the Bankruptcy Code authorizes, with apparent clarity, bankruptcy courts to, inter alia, “determine the amount or legality of any tax,” taxing authorities often oppose motions for relief under section 505(a) and challenge bankruptcy courts’ jurisdiction to hear such motions.[i] Such was the case in a recent decision rendered by the Bankruptcy Court for the District of Delaware. Continue reading