The following summary derives from the Memorandum and Opinion of the U.S. District Court for the Southern District of Texas at Houston in matter captioned Sullivan v. Feldman, Case No. H-20-2236 (Dec. 20, 2022), and which you can ― and should ― read for yourself here. Although I will try in good faith to summarize this as accurately as possible, readers are cautioned that to the extent my summary in any way deviates from the Memorandum and Opinion then of course the latter should control.
Two Louisiana plastic surgeons (“Doctors”) were looking for a tax shelter for themselves and various of their medical-related businesses (“Doctor Entities”). The Doctors learned that a captive insurance company arrangement could provide them with the desired tax shelter, as well as also potentially reduce their exposure to various liabilities and losses, which was also a nice plus.
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