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Secured Lender Primes Earlier Federal Tax Lien in Fourth Circuit Split Decision
November 19, 2014
The U.S. Court of Appeals for the Fourth Circuit, on Oct. 31, 2014, held in a split decision that a lender’s unrecorded lien primed an earlier unrecorded federal tax lien on a Chapter 11 debtor’s real property. In re Restivo Auto Body, Inc., 2014 WL 5488166 (4th Cir. Oct. 31, 2014) (2-1). Relying on “Maryland[’s] common law … doctrine of equitable conversion,” the court reasoned that the lender was entitled “to the same protections as a [good faith] purchaser for value who takes title free and clear of all subsequent liens regardless of recordation.” The dissent, however, argued that federal law governs “the priority of federal tax liens” and that the debtor taxpayer had no “unencumbered title to … give” the lender. As a result, in the dissent’s view, the lender’s asserted liens were junior to the earlier federal tax lien and the majority erred by applying “state law to determine the priority of the IRS’s tax lien to the property.” The priority of a federal tax lien, the dissent insisted, “is determined solely by federal law.” The case reassures secured lenders unaware of a borrower’s preexisting tax lien, for it protects them against the government’s nondisclosure.
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The US Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) have overhauled Form PF and private fund managers have until March 12, 2025, to begin reporting on the new Form. The changes to the reporting requirements mandated by the amendments to the Form (“Form PF Amendments”) will require substantial preparation by many managers.[1]
Alerts
On March 1, 2024, New York Governor Kathy Hochul signed into law an amended version of the New York LLC Transparency Act (“NYLTA”),[1] requiring certain limited liability companies (“LLCs”) formed or authorized to do business in New York (each, a “NY Reporting Company”) to file a beneficial ownership information (“BOI”) report with the NY Department of State (“NY DOS”). Each NY Reporting Company will be required to disclose on its BOI report identifying information pertaining to each individual who directly or indirectly exercises substantial control or owns or controls 25 percent or more of the ownership interests of a NY Reporting Company (each, a “Beneficial Owner”) and the individuals involved in the NY Reporting Company’s formation or registration to do business in New York (each, an “Applicant”). Information reported to NY DOS will be maintained in a private database not accessible to the public. The NYLTA goes into effect on Jan. 1, 2026 and requires the NY DOS to promulgate regulations implementing the legislation.
Alerts
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