Bankrupt Bluestem Denied Access To Parent's Tax Assets

Law360, Wilmington, Del. (March 10, 2020, 11:48 AM EDT) -- Fingerhut catalog owner Bluestem Brands Inc. lost an opening day Chapter 11 battle with its nondebtor equity owner Tuesday as a Delaware bankruptcy judge refused to grant the debtor interim control of an alleged billion dollars or more in net operating loss tax credits.

U.S. Bankruptcy Judge Mary F. Walrath said BBI provided insufficient evidence of a right to limit trading in NOLs held by Bluestem Group Inc., which acquired BBI in 2014 and owns 100% of BBI's stock, with the multiple companies treated as a consolidated group for tax purposes.

The rejection followed a caution from an attorney for Bluestem...

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