Washington Mutual Inc. ex rel. H.F. Ahmanson & Co. v. United States

concurring:

I am not satisfied that Washington Mutual, Inc. (“WaMu”) can establish a cost basis in the rights that the government gave Home Savings of America (“Home Savings”) when Home Savings took over other savings and loan institutions pursuant to a tax-free “G” reorganization. 1 However, I concur in the result on a different ground — those rights have a fair market value basis.

WaMu, successor in interest to Home Savings, brought this action to recover income taxes that Home Savings allegedly overpaid to the United States. The district court granted summary judgment to the government, and this appeal followed.

WaMu asserts that the regulatory accounting privileges (“RAP”) and the branching rights (hereafter collectively “the Rights”) received from the Federal Savings and Loan Insurance Corporation (“FSLIC”) as part of an Assistance Agreement between FSLIC and Home Savings have a fair market value basis. 3 WaMu appears to be correct; surely they had great value, which is why the transaction went forward. However, the government asserts three reasons that WaMu is in error. I reject those reasons.

First, the government says, the Rights were not received from FSLIC at all,…

Opinion by Judge B. FLETCHER; Concurrence by Judge FERNANDEZ.

OPINION

This is yet another case arising in the aftermath of the Government’s efforts to contain the savings and loan crisis of the late 1970’s and the early 1980’s. In 1981, Home Savings of America, FSB (“Home Savings”), agreed to acquire three failing savings and loan associations, or thrifts. In exchange, the Federal Savings and Loan Insurance Corporation gave Home Savings a generous package of incentives that included, among other items, the right to maintain branches in other states (the “branching rights”) and the right to use the purchase method of accounting for regulatory capital reserve purposes (the “RAP rights”) (together, “the Rights.”).

Washington Mutual, Inc. (“Washington Mutual”), as successor in interest to Home Savings and its parent company, H.F. Ahmanson & Co. (“Ahmanson”), filed amended tax returns with the Internal Revenue Service (IRS), seeking refunds for 1990, 1992, and 1993 based on the amortization of the RAP rights and the abandonment of the branching rights. After the IRS denied the claims, Washington Mutual sued in district court. The district court ruled on summary judgment that Home…