Research

New Tax Law a Windfall for Buyers of Struggling Banks

With all eyes on the $700 billion in bailout funds, some of the nation’s largest banks have received additional financial help thanks to a new tax policy quietly issued by the Treasury Department in September. Professor Paul Griffin an internationally recognized specialist in the areas of accounting, financial valuation and business taxation, has been called on to unravel the complex implications of the sweeping change, which gives substantial tax breaks to companies that acquire struggling banks hit hard by the sub-prime mortgage crisis.

According to reports, the change could cost the U.S. taxpayers as much as $140 billion by enabling firms that acquire struggling banks to use more losses incurred by those banks to offset their own profits. Wells Fargo, which made a bid to acquire Wachovia Corp., just days after the notice was issued, stands to reap about $20 billion in additional tax savings because of the change, according to experts.

Wells Fargo paid $14.8 billion in a stock deal to buy Wachovia. When one bank acquires another, it is allowed under tax law to use some of the unrecognized losses of the bank it acquires to offset its own revenues for tax purposes. That lowers the tax liability of the merged bank. Before the notice was issued, the merged bank could write off only a limited amount of the losses. The notice removed those restrictions, enabling the acquiring banks to make huge reductions in their tax liabilities. Some have doubted the legality of the tax change.

Griffin is currently advising the government on the fairest way to distribute claims against the government and whether claimants should be reimbursed for potential taxes payable on those claims.

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News Release

UC Davis Graduate School of Management partners with Lawrence Livermore and Sandia National Labs to drive technologies from lab to market

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(Davis, Calif.) – With a joint goal of speeding the transfer of new technologies from the laboratory to the commercial marketplace, the UC Davis Graduate School of Management, Lawrence Livermore National Laboratory and Sandia National Laboratories have announced a new partnership for researchers to develop their entrepreneurial skills.

Spotlight Story

Vickie Sherman MBA 13 Finds Her Passion, Her Career—and Herself

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What opportunities, decisions, events have shaped your professional life?

My career path has been a climb across a jungle gym rather than a tangent up a corporate ladder. As a child, I used to thumb through the three-inch JCPenney catalogue, picking out the professional women who I would grow to be. I wanted to rule the world from a corner office in a suit and heels. I wanted to shed my humble origins and become Corporate Barbie.

Spotlight Story

MBA Student Consultants Make an IMPACT
Projects Put Business Needs Front and Center

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Agilent Technologies’ Electronic Measurement Group is a $3.6 billion business that over the past decade has seen a dramatic shift in its customer base from U.S., and Western European customers to predominantly Asia-based customers. Today, the majority of the division’s revenues are generated outside of the U.S., with an increasing concentration in China.

Spotlight Story

UC Davis Part-Time MBA in Top 8%, Full-Time MBA in Top 9%
U.S. News & World Report’s latest rankings: This marks the 19th consecutive year our MBA program has been ranked among the best in the nation.

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(Davis, CA) — The UC Davis Graduate School of Management’s full-time MBA program has been ranked among the top six percent of AACSB International-accredited programs nationwide, according to U.S. News & World Report’s latest graduate business school rankings released today.