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O’Melveny’s Rapisardi, Zujkowski Co-Author NYLJ Piece on FDIC ClaimsNovember 07, 2013 O’Melveny & Myers partner John Rapisardi and counsel Joseph Zujkowski co-authored a New York Law Journal piece focused on several recent rulings involving the Federal Deposit Insurance Corporation (FDIC), which serves as the appointed receiver of hundreds of failed domestic banks, and is involved in ongoing litigation over the right to billions of dollars in tax refunds. In “Decisions Address FDIC Claims to Defunct Bank Tax Refunds,” the authors note that these disputes “are a matter of contract interpretation and hinge on whether the terms of the tax sharing agreement (TSA) between the subsidiary bank and its parent holding company create a debtor-creditor relationship that entitles the holding company's bankruptcy estate to the refund.”
The article discusses two recent Eleventh Circuit decisions interpreting TSAs in favor of the FDIC and a subsequent ruling from the US Bankruptcy Court for the District of Delaware regarding Downey Financial Corp, which rejects the FDIC's position. The authors recommend that bankruptcy practitioners “monitor whether any future US bankruptcy courts that consider these issues follow or are influenced by the discussed Eleventh Circuit opinions, or, like the court in Downey, distinguish these decisions based on the terms of the TSA at issue.”
Rapisardi is co-chair and Zujkowski is a member of O’Melveny’s Global Restructuring Practice. Matthew Kremer, an associate in the Restructuring Practice, also assisted in the preparation of the article. They reside in the Firm’s New York office.