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Orion Bankruptcy Objection Filed

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The Internal Revenue Service (IRS) filed with the U.S. Bankruptcy Court an objection to Orion Healthcorp’s financing motion.

The IRS asserts, “Preliminarily, the IRS notes that the Civil Division of the Department of Justice has previously filed a limited objection that focuses primarily on $55,267,485 that is the subject of a seizure unrelated to federal tax issues (Doc. 71). Pursuant to 28 C.F.R. section 0.70, the Tax Division of the Department of Justice represents the United States in regard to federal tax issues. Some of the arguments made in the First U.S. Objection are more generic and the IRS concurs in that objection in all respects, including but not limited to its reservation of any rights of setoff or recoupment. As of this date, due to the size and scope of this bankruptcy proceeding, the IRS is still attempting to determine whether any of the debtors have any prepetition federal tax liabilities.”

In addition, “Even if that is not the case, it is not uncommon for bankruptcy estates to incur administrative tax expense without fully paying such expense in the ordinary course of business. The IRS is therefore concerned that its rights and those of the estate’s fiduciary (debtor in possession or future trustee) not be pretermitted before there is even adequate time to investigate, let alone a live case or controversy….The IRS also respectfully submits that aspects of the proposed order as well as the Interim Order (Doc. 50) are simply improper at this stage of any case and that the Court should be protecting the interests of creditors regardless of the apparent willingness of the debtors in possession to abdicate.”

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