Federal Deposit Insurance v. Amfin Financial Corp.
490 B.R. 548
N.D. Ohio2013Background
- AmTrust Financial Corp. (AFC) and affiliated entities filed for chapter 11; AmTrust Bank was closed by the FDIC, which became receiver.
- FDIC contends any tax refund is property of AmTrust Bank, not AFC.
- AFC argues the refund is property of the holding company and that FDIC has only an unsecured claim.
- Parties refer to two tax sharing agreements (1996 and 2006) governing intercompany tax allocations.
- Court analyzes whether the refunds are owned by AFC or held as a debt/receivable by AFC under the tax sharing agreements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do the tax refunds belong to AFC or to AmTrust Bank/FDIC? | AFC contends refunds are AFC property under the agreements. | FDIC contends refunds belong to the Bank as a trust/agency for the group. | Refunds are property of the debtor AFC. |
| Do the tax sharing agreements create an agency or trust for the refunds? | FDIC relies on authority suggesting a trust/agency. | AFC asserts a debtor–creditor relationship via reimbursements. | Agreements create a debtor–creditor relationship, not agency or trust. |
| Does 12 U.S.C. § 371c or other statutes invalidate the tax sharing agreements? | FDIC argues statutory restrictions invalidate the agreements. | IndyMac analysis rejects invalidity and shows no loan/extension of credit created. | Statutes do not invalidate the agreements; no loans or invalid transfers. |
Key Cases Cited
- In re Bob Richards Chrysler-Plymouth Corp., Inc., 473 F.2d 262 (9th Cir. 1973) (no implied agency creating ownership of refunds; foundational for debtor–creditor view)
- BankUnited Financial Corp., 462 B.R. 885 (Bankr.S.D. Fla. 2011) (tax sharing terms create debtor–creditor relationship; refunds as receivables)
- In re NetBank, Inc., 459 B.R. 801 (Bankr.M.D. Fla. 2010) (reimbursement/credit terms indicate debt relation between entities)
- In re First Central Financial Corp., 269 B.R. 481 (Bankr.E.D.N.Y. 2001) (discussion of consolidated returns and intercompany allocations supports debt characterization)
- In re Franklin Savings Corp., 159 B.R. 9 (Bankr.D. Kan. 1993) (authority on intercompany tax allocations and related recoveries)