CBL Properties Says Debt Cut May Hand Some Owners a Tax Bill

A small number of equity holders of CBL Properties may wind up with a tax bill under a restructuring proposal to reduce the mall owner’s debt load, the company warned investors Tuesday.

• Some investors hold their equity as limited partners instead of as common shareholders, and may be subject to IRS rules governing “cancellation of indebtedness income”
  • Under that tax provision, when certain types of corporations convince creditors to cancel debt as part of a reorganization, the reduction is considered income for the partners who own the company
• CBL investors subject to the IRS rule may be able to avoid ...