BankUnited files tax return, probing carrying NOLs forward as basis for Chapter 11 transaction

By Jennifer Lanning Drey

Portland, Ore., June 18 - BankUnited Financial Corp. and its subsidiaries filed a consolidated tax return for the year ended Sept. 30, 2009, which included a reported net operating loss of $3.753 billion for the period, according to an 8-K filed with the Securities and Exchange Commission on Friday.

In connection with the tax return filing, BankUnited also filed an application with the IRS for a tentative refund through which it elected to carry back to previous years $129.21 million, thus claiming a refund of $42.55 million for taxes paid in fiscal years 2003, 2005 and 2006.

If the tax return is accepted by the IRS as filed, the company will be left with a remaining net operating loss of $3.623 billion for the year ended Sept. 30 , 2009 after application of the net operating loss carryback.

Possible Chapter 11 transaction

According to the filing, the company proposes to explore the ability to carry the remaining net operating loss forward to future years as the basis for a Chapter 11 transaction that it said could generate significant additional value for the company's bankruptcy estate and creditors.

BankUnited is also considering and evaluating other alternatives to maximize the value of its tax attributes, which could require amending the tax return.

The company also noted in the filing that the Federal Deposit Insurance Corp., in its capacity as receiver for BankUnited's wholly owned former subsidiary BankUnited FSB, filed a motion with the U.S. Bankruptcy Court for the Southern District of Florida on May 25 seeking permission to file a competing consolidated tax return on behalf of the company and its subsidiaries for the year ended Sept. 30, 2009.

BankUnited and the FDIC are currently engaged in litigation with respect to the ownership of certain tax refunds and other tax attributes.

BankUnited Financial, the holding company for BankUnited FSB, filed for bankruptcy on May 22, 2009 in the U.S. Bankruptcy Court for the Southern District of Florida. The company is based in Coral Gables, Fla. The Chapter 11 case number is 09-19940.

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