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FinCEN Provides Corporate Transparency Act Reporting Guidelines for Bankruptcy but Uncertainty Remains

The Corporate Transparency Act (CTA) has created unique uncertainty and ambiguity in the context of bankruptcy cases throughout the country. The goals of the CTA are to prevent financial crimes like money laundering and tax evasion.

In In re YLG Partners, Inc., No. 23-10709 (Bankr. M.D.N.C.) and In re BOA Nutrition, Inc., No. 23-03665-5-PWM (Bankr. E.D.N.C.), the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has provided guidance that Chapter 7 bankruptcy trustees are generally not responsible for providing a debtor’s beneficial ownership report under the CTA.

In this Reuters article, Restructuring & Bankruptcy partner Bethany Simmons and associate Noah Weingarten explore FinCEN's stance on the CTA and Chapter 7 cases. They discuss how its guidance in the YLG Partners and BOA Nutrition cases might have broader implications, including for Chapter 11 proceedings.