Texas Comptroller of Public Accounts filed with the U.S. Bankruptcy Court an objection to Light Tower Rentals’ Joint Prepackaged Chapter 11 Plan.
The objection asserts, “The Plan appears to provide that any administrative tax claims will be timely and fully paid in compliance with Texas tax laws, including the timely filing and payment of all required post-petition returns….The Bankruptcy Code makes clear that the entire amount of any debts owed to the Texas Comptroller for post-petition tax debts, including all tax, interest and penalties accrued through the date of payment, will be paid in full in one lump sum when due without any requirement that the Texas Comptroller to file any claim or request for payment.”
The objection continues, “The Debtors and Reorganized Debtors should simply file and pay these returns on a timely basis as provided by Texas law in the ordinary course of business, and the Texas Comptroller should be allowed to take immediate enforcement action without further order of the Court in the event of a failure to do so….The Plan creates Class 5 for General Unsecured Claims which are declared unimpaired and will be paid on the Effective Date or when due in the ordinary course of business. Accordingly, for the avoidance of doubt, the Plan or Confirmation Order should make clear that priority tax claims will receive this same treatment.”
In addition, “The Plan or Confirmation Order should make clear that no setoff rights in favor of the Debtors or Reorganized Debtors are created as against the Texas Comptroller….The Debtors’ should not be able to re-write the Bankruptcy Code to suit them by incorporating plan language that expands their rights beyond the language used in the Code.”
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