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Northwest Challenged Over Tax Payment Plan

Law360 (May 9, 2007, 12:00 AM EDT) -- The U.S. government has objected to Northwest Airlines Corp.’s reorganization plan, saying it would allow the company to skirt some of the $388 million it currently owes in taxes.

In court documents filed Monday with the U.S. Bankruptcy Court in Manhattan, the government alleged that the reorganization plan did not indicate when the taxes would be paid and that it provided the Internal Revenue Service with an “unreasonably low rate” of 5% interest on the claim.

“Payments should not be left to the debtor’s sole discretion....
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