IRS Loses Bid To Tap LifeCare Sale Funds For $24M Tax Claim

Law360, Wilmington (March 11, 2014, 6:08 PM EDT) -- A Delaware federal judge on Monday dismissed an appeal of LifeCare Holdings Inc.'s $320 million bankruptcy sale to Carlyle Group LP, stymieing the U.S. government's bid to realize its $24 million tax claim from the sale proceeds.

Affirming the findings of the bankruptcy court, U.S. District Court Judge Sue L. Robinson rejected the government's argument that approval of the sale and a related settlement violated the Bankruptcy Code because they gave the Internal Revenue Service nothing for its administrative claim yet set aside funds for other...
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