Downey Creditors Beat FDIC for $370 Million Tax RefundJanuary 27, 2015 – In The News
Fox Rothschild LLP was featured in the Bloomberg Bankruptcy article, "Downey Creditors Beat FDIC for $370 Million Tax Refund.” Full text can be found in the January 27, 2015, issue, but a synopsis is below.
Creditors of Downey Financial Corp., whose bank subsidiary Downey Saving & Loan Association was previously taken over by regulators, received a $370 million victory at the expense of the Federal Deposit Insurance Corp. on an issue dividing the federal courts of appeal.
The U.S. Court of Appeals for the Third Circuit’s opinion upheld U.S. Bankruptcy Judge Christopher Sontchi, who decided that a tax refund goes to the parent Downey Financial even though the refund was generated by losses incurred by the bank subsidiary taken over by the FDIC.
The Downey Trustee was represented by Michael G. Menkowitz, William H. Stassen, Raymond M. Patella and L. John Bird.
Attorneys, Peter C. Buckley and Maura L. Burke also contributed to the victory.