Builder's Trustee Can't Collect From IRS, 11th Circ. Says

Law360, New York (March 26, 2014, 4:29 PM EDT) -- The Eleventh Circuit on Wednesday quashed a bankruptcy trustee's attempt to recover tax payments a construction company made to the Internal Revenue Service before filing for Chapter 7, finding the IRS was shielded by the "mere conduit" exemption in the U.S. Bankruptcy Code.

The ruling shuts the door on trustee Deborah Menotte's bid to recover from the IRS prepetition payments made by debtor Custom Contractors LLC to cover its founder's outstanding tax liability. The ruling affirms a lower court's decision that also found that a safe...
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