Cancellation of debt – a key element of most restructurings – generally triggers taxable income. The German tax authorities had issued an administrative decree (the “Tax Restructuring Decree” – Sanierungserlass), however, declaring that, upon the satisfaction of certain requirements and conditioned on forfeiture of any loss carry forwards, the cancellation of debt income (“CODI“) would not be taxed. Reliance on the administrative decree was essential for restructurings since the utilization of loss carryforwards in Germany is limited to 60% of the income to the extent the deductible base amount of EUR 1 Mio. is exceeded. Thus, a significant tax liability might otherwise be incurred.