Such an assumption is almost certainly incorrect based upon the facts contained in the opinion. While the filing of the bankruptcy probably made the remaining NOL worthless to everyone, the bankruptcy had not been filed as of the date of the election and thus arguably should not be taken into account in determining whether reasonably equivalent value was received at the time the election was made. The court's conclusion that an election that is irrevocable under the Internal Revenue Code may nevertheless be revoked pursuant to the Bankruptcy Code is troubling. While it is quite unlikely that a suit to set aside a debtor's short year election as a fraudulent conveyance would ever succeed, results driven decisions such as Feiler make it possible for trustees to bring such an action with a straight face. Such decisions cause bankruptcy tax practitioners to cry all the way to the bank.
Debtors merely cry.
The interpretations of law and opinions herein are those of the author alone and do not necessarily reflect those of the Orange County Bankruptcy Forum, its directors, officers, or members. Cases, statutes or rules summarized or cited herein should not be relied upon without fully reading the case, statute or rule, and checking subsequent case history, etc. Dee Beckert and Henry Arjad have provided technical support.