Supreme Court justices spent much of a Dec. 3 argument questioning the validity of a court rule that favors corporate subsidiaries in fights with a parent company over the status of a tax refund during bankruptcy proceedings.
The federal common law rule known as the Bob Richards rule—developed by judges—presumes that such refunds are owned by subsidiaries unless there was a clear agreement to the contrary, according to the U.S. Court of Appeals for the Tenth Circuit decision being challenged in the case.
While some members of the court were skeptical of the Bob Richards rule, there was some ...