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The basic resolution 876 case affects the bondholders significantly because if the payments to them had been terminated they would have received some discounted amount of the principle left. But because they’re continuing to receive these payments over 20 years in their industrial revenue bonds those are all tax free, the interest payments are tax free from federal and state income tax. And so a stream of income that comes in over 20 years where you don’t have to pay income tax on it is very valuable and has been a great benefit to the bondholders.
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Minneapolis commercial litigation and professional liability defense attorney Keith Broady discusses the impact of What is the legal significance of In re Petition for Instructions to Construe Basic Resolution.