In re LMS Holding Co.
United States Court of Appeals for the Tenth Circuit
50 F.3d 1526 (1995)
The IRS (creditor) perfected a federal tax lien against MAKO, Inc., which went bankrupt; RMC (debtor), an unrelated entity, acquired all of MAKO's bankruptcy estate assets and assumed MAKO's secured liabilities including the tax lien, with the IRS consenting to the plan but never filing a new lien notice naming RMC. RMC and its affiliates LMS Holding Company and Petroleum Marketing Company later filed their own bankruptcy, and RMC sought to avoid the tax liens on the assets it had acquired from MAKO; the bankruptcy court and district court held the IRS needed to refile the lien notice under RMC's name to preserve priority, and the IRS appealed.
Whether the Internal Revenue Service must refile a notice of a federal tax lien under a successor entity's name, when that entity assumes the original debtor's tax liability, if a bona fide purchaser of the encumbered property would not otherwise discover the lien through the original notice.