Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Bankruptcy StrategistKickerFeaturesSectionsNewsLJN Newsletters

Order in the Court: Limits on the Court's Preservation of Debtor Assets

By Jerome M. Schwartzman and Steven J. Joffe
August 31, 2004

Telecom companies invest substantial amounts to acquire their assets, such as underground cables or fiber optic networks. As a consequence of building or acquiring this capital-intensive infrastructure, telecom companies often pay millions of dollars in annual property tax assessments. When telecom asset values drop (as has most recently been the case), telecom companies generally focus on keeping their businesses afloat, rather than on their property taxes.

A Case in Point

Take the case of Metromedia Fiber Network (MFN), which recently emerged from Chapter 11 under the name AboveNet, Inc. As part of the reorganization of its business, Metromedia realized that it had been assessed millions of dollars in property taxes over the prior several years (and would continue to be assessed property taxes), based on assessed asset values that clearly did not reflect the assets' current fair market value. In a clever move, MFN initiated an adversary proceeding in the bankruptcy court seeking a determination of the value of its assets for property tax purposes that would be binding on the state and local taxing jurisdictions. The proceeding included many of MFN's state and local property tax jurisdictions (more than 1000 taxing jurisdictions in which MFN had assets). Metromedia Fiber Network, Inc. v. Various State and Local Taxing Authorities, 299 B.R. 251 (S.D.N. Y. July 15, 2003) (the MFN Case).

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Removing Restrictive Covenants In New York Image

In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?

The Benefits of Blockchain for e-Discovery and Data Preservation Image

As businesses across various industries increasingly adopt blockchain, it will become a critical source of discoverable electronically stored information. The potential benefits of blockchain for e-discovery and data preservation are substantial, making it an area of growing interest and importance.