In Companies’ Creditors Arrangement Act (CCAA) proceedings, LoyaltyOne, Co. and its Monitor sought a declaration that a Tax Matters Agreement (TMA) was not binding or was void as a transfer at undervalue (TUV), and sought to disclaim the TMA to secure a $96 million tax refund.
Bread Financial Holdings, Inc. (formerly ADS) cross-moved to set aside the disclaimer, asserting its entitlement to the refund under the TMA.
The court ruled that LoyaltyOne was bound by the TMA, the TMA was not void as a TUV, and the disclaimer was not approved.
The court found it premature to determine the specific nature of Bread's rights to the refund.
