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The COVID-19 pandemic raises the specter of borrowers defaulting on their loans and debt issuances. Renegotiation and workout of those obligations must occur, either in or out of bankruptcy. Any time where a borrower and lender change the terms of a pre-existing debt obligation, the possibility of tax consequences are almost a certainty. Whether those tax consequences are adverse to any party depends, in many cases, on whether the parties are adequately and appropriately counseled through the process.
Steve Phillips takes a look at these issues in a new whitepaper to the firm's clients and friends that you can find here.