Recovery Act Permits Deferral of COD Income, Facilitates Issuer Repurchases and Restructuring of Debt

Recovery Act Permits Deferral of COD Income, Facilitates Issuer Repurchases and Restructuring of Debt

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A deep and diverse practice focused on maximizing tax efficiencies and minimizing tax risks for clients nationally and internationally.
WilmerHale has been at the forefront of complex financial restructuring and bankruptcy litigation and policy matters for decades.
In the current economic environment, many companies are considering restructuring their debt or repurchasing their debt at a discount with cash or common stock. One of the main considerations of such a restructuring or repurchase is the tax consequences to the company. The American Recovery and Reinvestment Act of 2009, signed by President Obama on February 17, 2009, provides some relief to companies considering a restructuring or repurchase by allowing companies to make an election to defer the inclusion of certain COD income recognized in 2009 and 2010 to future taxable years. For more on restructuring and repurchasing under the Recovery Act, see our recent Email Alert.

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