The current market climate has created opportunities for investors or debtors themselves to acquire outstanding debt at remarkable discounts. Unfortunately, it also has left many companies struggling and in need to modify their outstanding debt. Many large, well known companies have dissolved or declared bankruptcy. Debt modifications, repurchases and bankruptcy can have a profound tax impact on borrowers and lenders alike. In this teleconference, we will discuss a myriad of issues, including rules that treat debt modifications as taxable transfers, the taxation of cancellation of indebtedness income and exceptions thereto, and the stimulus package rules that allow for a deferral of tax on the cancellation of indebtedness. We also will discuss the impact of these transactions on holders of distressed debt. The stimulus package includes provisions designed to encourage the deleveraging of American companies. However, the rules are technical and detailed. Any person advising a company considering modifying or repurchasing its debt or declaring bankruptcy should attend this important teleconference.

Faculty

Steven D. Bortnick, Pepper Hamilton LLP
Todd B. Reinstein, Pepper Hamilton LLP