The Implications Of Piccadilly Cafeterias

Law360, New York (July 18, 2008, 12:00 AM EDT) -- On May 16, 2008, the U.S. Supreme Court decided Florida Department of Revenue v. Piccadilly Cafeterias Inc. and ruled that debtors who sell property during the course of a Chapter 11 case prior to the confirmation of a plan cannot use Section 1146(a) of the Bankruptcy Code to exempt those sales from applicable state transfer and stamp taxes.

A seven-person majority of the Supreme Court held that the language of Section 1146(a) limited the exemption "only to those transfers made pursuant to a Chapter 11 plan...
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