On July 9, the Seventh Circuit ruled that the Illinois Department of Revenue (IDOR) cannot collect delinquent retail and sales taxes from the proceeds of bankruptcy sales of several businesses because the IDOR did not present evidence of how much it lost when the courts allowed the deals to go forward free of any creditor's interest, which cutoff IDOR's right to pursue the purchasers of the assets under Illinois Bulk Sales Acts. Freeborn client Hanmi Bank was a secured creditor in the bankruptcy cases, holding mortgages for a group of five Illinois gas stations involved in four of the bankruptcies. Shelly A. DeRousse, Co-Leader of Freeborn's Bankruptcy and Financial Restructuring Practice Group and counsel for Hanmi Bank, told Law360 in an interview that the court ruling was correct and that the banks "were underwater and the state of Illinois should not have been paid ahead of them."
To read the Law360 story about the ruling, published July 9, 2018, click here (subscription required).
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