ALBANY – A company that bought an upstate city's real property tax liens is holding a "tax claim" within the meaning of bankruptcy law and is entitled to the same 21 percent post-sale statutory interest the municipality could have obtained, a Northern District judge has held.
At issue before Chief Bankruptcy Judge Robert Littlefield Jr. (See Profile) was whether §511(a) of the U.S. Bankruptcy Code, which addresses tax claims, applies only to government entities or to private creditors as well. Littlefield found that §511(a) applies equally to private entities holding a valid tax claim, rejecting the debtors' argument that whatever interest American Tax Funding (ATF) obtained in their property it was not a tax claim.
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