WASHINGTON — A bank subsidiary should be able to claim tax refunds resulting from the institution's losses even if its tax returns are filed by the holding company, the federal bank regulators said in guidance issued Friday.

The guidance is meant to clear up confusion over who owns rights to the tax refunds, which had sparked legal battles between holding company creditors and the Federal Deposit Insurance Corp. Some courts had read tax agreements as favoring the holding company — and in turn its bankruptcy estate — while others had favored the FDIC as receiver for the parent's failed subsidiary.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.