Federation Bank & Trust Co. v. Commissioner
United States Tax Court
Petitioner bank was closed by the State Superintendent of Banks on October 30, 1931, and it reopened in 1932 after most of the depositors waived one-third of their deposits, under a plan whereby the depositors received certificates entitling them to share in the proceeds of the liquidation of designated assets.
Read the full summary
Petitioner bank was closed by the State Superintendent of Banks on October 30, 1931, and it reopened in 1932 after most of the depositors waived one-third of their deposits, under a plan whereby the depositors received certificates entitling them to share in the proceeds of the liquidation of designated assets. Under the plan the petitioner was to receive the first $ 5,530,036.25 of the proceeds of liquidation and a trustee for the certificate holders the balance up to $ 2,528,461.02. In 1942 petitioner had not recovered its senior interest, but it extinguished the junior interest of the…
1Opinion of the Court
OPINION.
MulROney, Judge:
We will make a short summary of some of the foregoing facts before proceeding with, a discussion of the issues. Petitioner, a banking corporation, was taken over by the Superintendent of Banks of the State of New York in 1931. It was allowed to reopen in 1932 after having submitted and having approved a plan of reorganization which involved the raising of new money and the reduction of deposit liability.
Reduction of deposit liability is the part of the reorganization in which our problem falls. Briefly, a majority of the depositors waived one-third of their deposits…
2Cases cited5 opinions
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- Helvering v. American Chicle Co.Supreme Court of the United States · 1934
- Great Island Holding Corp. v. CommissionerUnited States Tax Court · 1945
- Marks v. CommissionerUnited States Tax Court · 1956
- Mutual Ben. Health & Accident Ass'n v. CrowderMississippi Supreme Court · 1947
3Cited by3 opinions
- Bayles v. FolsumDistrict Court, N.D. West Virginia · 1958
- Naporano Iron & Metal Co. v. United StatesUnited States Court of Claims · 1984
- Federation Bank & Trust Co. v. CommissionerUnited States Tax Court · 1957