http://www.bloomberg.com/news/2014-10-1 ... efund.html
First some background taken right off Google Finance:
Doral Financial Corporation (Doral Financial) is a bank holding company. Doral Financial is engaged in retail banking activities in Puerto Rico and the United States through its banking subsidiary. Doral Financial has three wholly owned subsidiaries, which are Doral Bank (Doral Bank), Doral Insurance Agency, Inc. (Doral Insurance Agency) and Doral Properties, Inc. (Doral Properties). Doral Bank has three wholly owned subsidiaries in operation, Doral Mortgage, LLC (Doral Mortgage), Doral Money, Inc. (Doral Money), principally engaged in commercial lending in the New York metropolitan area, and CB, LLC, an entity incorporated to dispose of a real estate project.
Necessary info for understanding this. In 2006, Doral settled a case with the SEC due to them fudging the books in order to inflate earnings between 2000 and 2004 by $1 billion dollars. People went to jail etc.
http://www.sec.gov/litigation/litreleas ... r19837.htm
http://www.prnewswire.com/news-releases ... 54294.html
Now here's the thing. In the years following that, Doral made the novel decision of trying to argue that the loss of those previous fraudulent earnings represented a deffer ed tax asset and attempted to use those tax credits. When that failed they tried to argue that they were entitled to a $231 million cash tax refund.
However, if you go and look at the 10-K's the filed for the years in question. The total amount of income tax they paid was about $135 million yet they were given a tax refund for nearly double that amount.
http://www.sec.gov/Archives/edgar/data/ ... 3_ex13.htm
http://www.sec.gov/Archives/edgar/data/ ... 3e10vk.htm
Now you may ask yourself how do you get the Treasury Department to rubber stamp a tax refund on taxes you didn't pay on money you didn't earn? Well in an astronomical coincidence, the Secretary of the Treasury that signed the tax refund in March 2012, quit as Secretary in November and went to work for the Bank in December 2012.
http://newsismybusiness.com/ex-puerto-r ... e-banking/
http://www.elnuevodia.com/mendezllegaad ... 02485.html
http://www.elnuevodia.com/mendezpasadeh ... 02321.html
I have done a cursory search and as far as I can tell not only is converting deferred tax assets into tax refunds not allowed under Puerto Rico Tax Code, it isn't done under Federal Tax Codes or any other country. The rationale for such a prohibition is perfectly sound, otherwise a business could do nothing, incur $100 million in losses and ask for a tax refunds on those losses without ever producing anything of value.
This current judges decision appears to have legalized a new level of corporate corruption.