Teligent gets court approval of $2.95 million sale of tax attributes

By Sarah Lizee

Olympia, Wash., Nov. 30 – Teligent, Inc. secured court approval to sell about $2.95 million of tax attributes, according to an order filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

In the ordinary course of their business, the debtors generate various tax attributes on a state and federal level. The New Jersey Economic Development Authority has established a program, the Technology Business Tax Certificate Transfer Program, through which a qualifying entity may sell its unused carryforward net operating losses and research and development tax credits to a profitable unrelated entity for at least 80% of the value of those tax attributes.

The debtors are a qualifying entity and have about $2.95 million in qualifying tax attributes.

Through the program, the debtors have the ability to realize at least $2.36 million on account of a sale of the tax attributes.

There are some restrictions on how a seller may use the sale proceeds, however.

The funds may only be used for “allowable expenditures,” which include expenses of fixed assets, such as the construction, acquisition and development of real estate, materials, start-up, tenant fit-out, working capital, salaries, and research and development expenditures.

The proceeds may be subject to “recapture” if they are not used for any of the above purposes.

The debtors are working with a broker to complete documentation necessary to facilitate the sale and expect to select a purchaser and close a sale in December.

Teligent is a Buena, N.J.-based specialty generic pharmaceutical company. The company filed bankruptcy on Oct. 14 under Chapter 11 case number 21-11332.

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