Chapter 7 trustee resolves federal tax claims in bankruptcy court litigation
Clients Howard M. Ehrenberg, Chapter 7 Trustee
Jones Day successfully represented Howard M. Ehrenberg as chapter 7 trustee for the bankruptcy estates of Axium International, Inc. and its affiliates in eliminating more than $188 million in federal tax claims in exchange for a $2 million cash settlement payment. The settlement resolves the trustee's claims against the Internal Revenue Service, including novel equitable subordination claims that, if litigated successfully to a judgement, would have broken ground on the extent of the IRS's obligations to avoid dilatory tax monitoring practices. With the approval of this tax settlement, Jones Day and the Trustee effectively removed the primary remaining impediment to returning a distribution to general unsecured creditors.