Los repositorios para la preservación digital

For many years prior to the Petition Date, the Debtor and its subsidiaries elected to file consolidated federal tax returns pursuant to the Internal Revenue Code. From 2003 through 2008, the Debtor, as the parent of the consolidated group for it and its subsidiaries, filed consolidated federal tax returns with the IRS. Each of these returns were filed under the Debtor's name and federal tax identification number. The Debtor believes that during each of these years the Debtor made the quarterly estimated tax payments to the IRS under its name and using its tax identification number. As a result of these quarterly estimated tax payments, the group's tax liability for each year was paid in advance of the filing of any final tax return.

It is the position of the Debtor that it and its subsidiaries, including Colonial Bank, established and operated in the ordinary course of business pursuant to the terms of a certain intercompany tax allocation policy (the "Tax Allocation Agreement"); and that the Debtor's actions with regard to tax matters were in each case implemented pursuant to the Tax Allocation Agreement, including its annual filing of the consolidated federal income tax returns, the payment of estimated tax liabilities to the IRS, and, as discussed below, the Debtor's request for a refund for its 2008 tax year.

For each of the tax years from 2003 through 2007, the Debtor's consolidated federal income tax return reflected a positive income, thereby generating a tax liability. For tax year 2008, however, the consolidated group's performance suffered significant losses and it became apparent that tax refunds would be recoverable. Based on the apparent losses of the consolidated group, the Debtor filed in May of 2009 an estimate of its 2008 losses and a Form 1139 request for refund in the approximate amount of $166 million. By June of 2009, the IRS responded to the Debtor's Form 1139 and paid to the Debtor the estimated tax refund of $166 million and thereafter the Debtor transferred that approximate amount to Colonial Bank in connection with the Debtor's receipt of such tax refund.

The Debtor believes that it may be entitled to additional federal income tax refunds as a result of losses for tax purposes during tax years 2008 and 2009. However, a dispute exists between the Debtor and the FDIC-Receiver as successor to Colonial Bank regarding entitlement to any tax refunds that may be received from any federal, state or local taxing authority. The Debtor asserts that, based on the Tax Allocation Agreement and/or other applicable law, the Debtor is entitled to all or a substantial part of any tax refunds received. Consistent with its position throughout this Case with respect to virtually all of the Core Assets, the FDIC-Receiver asserts entitlement to all or substantially all of any refund of taxes paid on the asserted grounds that the Tax Allocation Agreement is unenforceable and that the refunds sought are based upon taxes paid by Colonial Bank or losses sustained by Colonial Bank in the years at issue. Absent a final adjudication of ownership or settlement of this dispute with the FDIC-Receiver, it is not possible to state with certainty at this time the amount of the Debtor's entitlement to any tax refund received from any federal, state or local taxing authorities. As described in greater detail in Chapter VIII of this Disclosure Statement, the issue of ownership of tax refunds is presently pending before the District Court. If any tax refund is received by the Debtor or the FDIC- Receiver, that refund is required to be deposited into a separate, segregated account in the Debtor's name pursuant to the Stipulation and Order Regarding Establishment of Segregated Account for Tax-Related Payments (the "Segregated Tax Deposit Account") [Doc. No. 621]

pending resolution of the issue of ownership. To the extent that the Debtor prevails on its position regarding entitlement to receive the tax refunds, the FDIC-Receiver will likely contend (and the Debtor may dispute) that it holds a substantial Unsecured Claim against the Estate with respect to the amount of refunds that constitute Estate Property.

The Debtor has retained the services of PricewaterhouseCoopers LLP to assist the Debtor in analyzing how to maximize the value of the Debtor's tax attributes. The Debtor has also conferred with the Case Committee and its professionals on this issue. At this time, the Debtor is unable to state with any degree of certainty all steps that may be taken or issues which may need to be addressed in connection with the Debtor's request for a refund of taxes from the IRS or the amount or timing of any refund. However, the Debtor timely filed its 2009 federal income tax return and has made its five-year carryback election. The FDIC-Receiver also filed a competing 2009 federal income tax return on behalf of Colonial Bank, a five-year carryback election and requests for refunds for the affected years, and, as a result of the filing of such competing return, there may be delays in the processing and payment of any tax refunds. As noted above, the FDIC-Receiver asserts rights to all or substantially all of any tax refunds received by the Debtor.

As for the additional tax refunds the Debtor believes it is entitled to receive, the Debtor believes it may be entitled to an additional refund of up to $4,600,000 in connection with its 2008 federal income tax return. Again consistent with its overall position in the Case, the FDIC- Receiver argues that this refund constitutes property of Colonial Bank and its subsidiaries and therefore is property of the FDIC-Receiver as successor to Colonial Bank. By order of the Bankruptcy Court entered on August 17, 2010 [Doc. No. 843], the Debtor received (and deposited into the Segregated Tax Deposit Account) approximately $573,172 from the Internal Revenue Service resulting from the Debtor's overpayment of federal income taxes for the 2008 tax year. Nothing in the Bankruptcy Court's order or in the relief provided therein constitutes a finding for any purpose of the relative ownership of, or other rights with respect to, any tax refunds, tax-related assets or other tax attributes as between the Debtor and either Colonial Bank or the FDIC-Receiver.

With regard to the Debtor's 2009 federal income tax return, the Debtor believes that it is entitled to a so-called "worthless stock deduction" based upon events surrounding the commencement of the receivership of its wholly-owned subsidiary, Colonial Bank, on August 14, 2009. The FDIC-Receiver disputes the availability under applicable tax law of the so-called "worthless stock deduction" and further maintains that the Debtor is not authorized to claim federal tax refunds based upon such a deduction, and that such refunds are the property of the receivership estate. The Debtor believes that its federal income tax filing for 2009 supports a request for tax refunds from the Internal Revenue Service of approximately $247,000,000. The FDIC-Receiver has advised the Debtor that the FDIC-Receiver filed a federal income tax return and refund request with the IRS as an asserted fiduciary for Colonial Bank and its subsidiaries that allegedly supports a request for tax refunds from the Internal Revenue Service of the same aggregate amount (approximately $253,000,000). Accordingly, there are competing requests for tax refunds seeking, on each entity's behalf, the maximum aggregate potential refund of $253,000,000.

The FDIC-Receiver has also asserted that, to the extent that the Tax Allocation Agreement is determined to be an enforceable executory contract and the Debtor is determined to be the owner of the tax refunds thereunder, (i) the Debtor's rejection of such Tax Allocation Agreement under the Plan or otherwise would prevent the Debtor from claiming ownership of the tax refunds based on such agreement and (ii) the Debtor's assumption of the Tax Allocation Agreement would give rise to an Administrative Claim in its favor for all tax refunds attributable to Colonial Bank and its subsidiaries (which the FDIC-Receiver argues is in an amount of approximately $253,000,000). The Debtor believes that, if and to the extent the Tax Allocation Agreement constitutes an executory contract, the rejection thereof does not adversely impact the Debtor's entitlement to receive any tax refund.