Imperial Capital Bancorp, Inc. v. Federal Deposit Insurance (In re Imperial Capital Bancorp, Inc.)
492 B.R. 25
S.D. Cal.2013Background
- Imperial is the direct parent of the Bank; they file consolidated tax returns for 2004-2009 for the group.
- FDIC, as Bank receiver, closed the Bank on December 18, 2009 and Imperial filed for Chapter 11 the same day.
- An August 24, 2010 stipulation placed tax refunds in a joint escrow pending this litigation.
- Imperial received two federal tax refunds in 2011 and 2010 totaling over $29 million and deposited them into escrow.
- The central issue is whether the Tax Refunds belong to Imperial’s bankruptcy estate or to the Bank.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do the Tax Refunds belong to Imperial or the Bank? | Imperial argues the TAA creates a debtor-creditor relationship. | Bank contends TAA is unenforceable or creates an agency only. | Imperial ownership; Tax Refunds are Imperial property. |
| Is the TAA binding on the Bank despite FDIC status? | TAA was executed and approved; binding despite FDIC. | TAA backdated/not board-approved; not binding. | TAA binding on the Bank; § 1823(e) not applicable here. |
| Does a presumptive agency relationship exist that would make Bank the holder? | TAA creates debtor-creditor, not agency. | Tax sharing policies imply agency absent a differing agreement. | No presumptive agency; TAA governs rights. |
| Do TAP and IPS override or modify the TAA’s relationship? | Not necessary; TAP/IPS reinforce, not contradict. | TAP/IPS render Imperial an agent for Bank. | TAP/IPS do not alter debtor-creditor relationship; do not require agency. |
| Does the TAA violate banking or bankruptcy law if it creates a debtor-creditor relationship? | Creation is permissible; not a loan; compliant with law. | Could constitute an impermissible loan or post-petition loan. | No violation; consistent with 12 U.S.C. § 371c and 11 U.S.C. § 365(c)(2). |
Key Cases Cited
- AmFin Fin. Corp. v. FDIC, 490 B.R. 548 (N.D. Ohio 2013) (tax sharing creates debtor-creditor relations)
- In re IndyMac Bancorp, Inc., 2012 WL 1037481 (Bankr.C.D. Cal. 2012) (tax sharing agreements define relationships; AmFin relied upon)
- In re BankUnited Financial Corp., 462 B.R. 885 (Bankr.S.D. Fla. 2011) (examines agency vs debtor-creditor in tax context)
- In re NetBank, Inc., 459 B.R. 801 (Bankr.M.D. Fla. 2010) (tax-sharing terms support debtor-creditor view)
- In re Franklin Sav. Corp., 159 B.R. 9 (Bankr.D. Kan. 1993) (early tax-sharing precedent on related issues)
- In re MCorp Fin., Inc., 170 B.R. 899 (S.D. Tex. 1994) (agency/attachment principles in financial arrangements)
- John v. RTC, 39 F.3d 773 (7th Cir. 1994) (statutory scope of § 1823(e) and assets in receivership)