The Supreme Court’s invalidation of the IEEPA tariff in Learning Resources, Inc., et al., v. Trump and Trump v. V.O.S. Selections, Inc., et al. has triggered a nationwide effort to recover previously paid duties. For restructuring and turnaround professionals, however, the implications extend far beyond cash recovery. Tariff refund claims raise questions about ownership, estate assets, liquidity modeling, compliance risk, and creditor negotiations.

Who Owns the Refund Claim?

Identifying the legal owner of the refund is often more complicated than it appears on the surface. In many cases, the importer of record paid the tariff and therefore holds the legal claim for a refund. In practice, customers, distributors, and downstream manufacturers may have borne the tariff economic burden through pricing provisions and surcharge clauses. Additionally, U.S. Customs and Border Protection (“CBP”) and U.S. Department of the Treasury (“Treasury”) have yet to note specific refund mechanisms which may further cloud entitlement.

Supply agreements, distribution contracts, and pricing schedules may contain provisions addressing tariff adjustments or pass-through mechanisms. These provisions can determine whether customers can claim entitlement to refunds or demand price adjustments once tariffs are invalidated.

Lenders may also assert interests in refund proceeds. If refund claims qualify as property of the estate, they may fall within the lender’s collateral package. In distressed situations, disagreements over ownership can delay recoveries or complicate restructuring negotiations.

Practical Steps:

• Confirm the importer of record for the relevant entries.
• Review customer and supply agreements for tariff pass-through and refund allocation provisions.
• Assess whether refund proceeds fall within secured lender collateral.
• Address ownership questions early to avoid disputes that could delay recovery.

Are Tariff Refund Claims Property of the Estate?

In distressed contexts, tariff refund claims may represent material assets. For companies operating near liquidity thresholds, even modest recoveries can influence cash flow projections, covenant compliance, DIP financing negotiations, enterprise valuation, and plan feasibility.

The temptation to treat anticipated refunds as near-term liquidity is understandable. But restructuring professionals must distinguish between potential claims, reasonably supportable claims, and realizable recoveries within a defined time frame as it may be years before recoveries are realized given that the administrative process has not yet been defined following the SCOTUS decision.

Expect courts and creditors to demand quantification supported by reconstructed import records, classification records, and payment histories. Many companies lack centralized trade documentation, particularly where imports ran across multiple subsidiaries, brokers, and legacy ERP systems.

Overstated claims invite regulatory scrutiny and potential False Claims Act exposure while understated claims may expose fiduciaries to criticism for failing to maximize estate value.

Illustration: A  mid-market manufacturer operating under tight liquidity constraints projects $25 million in potential tariff refunds that it includes in DIP financing assumptions. The company discovers that a significant portion of the imports lack consistent documentation supporting country-of-origin determinations and several classifications changed mid-period in response to profit margin and cost pressures.

If the company reduces its claim to reflect defensible positions, projected liquidity falls below covenant thresholds. If it proceeds with the full claim, it risks submitting representations that regulators may later scrutinize. The restructuring professional must navigate both liquidity and compliance risk — not simply maximize the headline number.

Practical Steps:

• Develop an early inventory of potential tariff refund claims by import period, product category, and tariff program.
• Separate potential claims, documented claims, and realistically recoverable claims within the restructuring timeline.
• Reconstruct supporting documentation including entry summaries, broker filings, classification determinations, and payment records.
• Conduct spot-checks of country-of-origin and classification documentation before incorporating claims into liquidity projections.
• Coordinate with customs counsel to assess defensibility of classifications and availability of administrative remedies amid emerging agency guidance following the SCOTUS decision.
• Model refund recoveries conservatively and disclose assumptions in DIP and restructuring projections.

How Might Refund Claims Affect Plan Confirmation and Creditor Negotiations?

Tariff refund claims can influence restructuring negotiations because they represent potential liquidity that did not previously exist. In some cases, projected recoveries may support post-confirmation forecasting or influence enterprise valuation.

However, lenders and creditor committees will expect refund projections to be supported by credible documentation and conservative assumptions. Overly optimistic estimates may undermine credibility if the claims later prove difficult to substantiate or recover,

Restructuring professionals should therefore treat tariff refunds similarly to other contingent assets such as litigation claims under evolving timelines. The focus should be on documented claims, realistic recovery timelines, and transparent modeling assumptions.

Practical Steps:

• Model high, medium, and low recovery scenarios rather than relying on a single estimate.
• Separate refund recoveries from baseline liquidity until documentation supports the claim.
• Present refund claims as contingent assets rather than baseline liquidity.
• Document methodology for estimating refund amounts so lenders and creditor committees can evaluate assumptions.
• Evaluate whether refund proceeds fall within existing collateral packages or require negotiated allocation.

Will a Refund Claim Reopen Past Conduct?

Many companies responded to high tariffs by reclassifying products, adjusting country-of-origin determinations, reconfiguring supply chains, and relying more heavily on customs brokers. Some decisions were well documented and conservative while others stretched compliance frameworks already under strain.

A refund submission invites regulators to revisit historical trade positions. Regulators examining claims may assess whether classification decisions were consistent, documented, and defensible and may lead to CBP audits, focused assessments, or parallel Department of Justice (“DOJ”) / False Claims Act theories for egregious cases. In distressed settings — where turnover, cost cutting, and system transitions are common — documentation gaps are unsurprising.

Turnaround and restructuring professionals should assess whether historical tariff-era conduct creates exposure separate from the refund as the process may surface overly aggressive classification strategies adopted during financial stress. A targeted review before submission allows management to calibrate risk appropriately.

Practical Steps:

• Review historical tariff-era classification and origin decisions before submitting refund claims.
• Identify entries where classifications or sourcing changed during periods of financial stress.
• Review documentation supporting country-of-origin determinations and assess whether re-export/re-routing structures may draw scrutiny.
• Evaluate whether refund claims could expose aggressive historical positions.

How Do Refunds Affect Financial Reporting and Solvency Implications?

Public companies should consider whether prior financial statements properly accounted for tariff liabilities and whether anticipated refunds qualify as contingent gains. Changes in projected recoveries may affect impairment analyses, going-concern assessments, and disclosure obligations.

In restructuring contexts, modest valuation shifts can materially affect fraudulent transfer analysis and solvency opinions. A projected refund recovery may alter enterprise valuation, creditor recoveries, or plan negotiations. Creditors who assumed limited recovery prospects may reassess positions once refund assets enter the model.

Illustration: Consider a retailer that transferred assets to an affiliate before filing for Chapter 11. Creditors later challenge the transfer as constructively fraudulent. After the Supreme Court’s ruling, the debtor identifies a substantial tariff refund claim tied to imports predating the transfer. Creditors might argue that the potential refund should have been considered in the solvency analysis at the time of the transaction. The debtor will counter that the refund was speculative and legally uncertain. The dispute now centers on whether a contingent regulatory recovery retroactively affects solvency conclusions. Refund claims, in this context, complicate not only forward-looking liquidity but backward-looking exposure.

Practical Steps:

• Consult accountants regarding treatment of refund claims as contingent gains.
• Evaluate if projected refunds affect impairment analyses or going-concern disclosures.
• Revisit solvency analyses where refund claims materially affect enterprise valuation.
• Document assumptions used in valuation models that incorporate tariff recoveries.
• Consider how best to align restructuring advisor views with those of auditors so that treatment in court filings and SEC disclosures remain consistent.

What Are the Fraud and Misrepresentation Risks?[i]

Refund submissions often require representations concerning the accuracy of historical data. If those representations rest on incomplete or inconsistent documentation, the submission itself may become a source of exposure.

Distressed companies often operate with reduced compliance staff and compressed oversight. Refund preparation may involve the same individuals who participated in original classification decisions which introduces governance risk. Representations made in refund submissions may rely on documentation created during periods of operational strain, creating self-review risk.

Common vulnerabilities include inflated calculations, duplicate submissions across affiliates, inconsistent classification methodologies, and inadequate segregation of duties. Where brokers maintained historical data, gaps in supervision may surface during reconstruction. Incentive structures may further complicate matters if management compensation depends on liquidity milestones tied to projected refunds.

Practical Steps:

• Consider a targeted risk assessment of the refund process with targeted compliance review before submission.
• Separate the teams preparing refund claims from personnel responsible for historical trade decisions if feasible.
• Implement verification procedures for reconstructed import data.
• Review calculations to prevent duplicate submissions across affiliates given shared Harmonized Tariff Schedule classifications are common practice.
• Evaluate segregation of duties in the refund preparation process.

What Are The Customs Broker Risks?

Many companies rely heavily on customs brokers. In distressed contexts, broker oversight may have weakened as internal trade compliance resources contracted. Refund claims may depend on broker-maintained data and prior filings. Additionally, reliance on brokers increased for many companies during the IEEPA tariffs, amplifying third party risk.

Practical Steps:

• Evaluate whether broker (i) engagement letters clearly defined responsibilities, (ii) indemnification provisions exist, (iii) documentation retention practices were sufficient, and (iv)prior classification advice was memorialized.
• Consider a second review of broker activity before submitting refund claims that rely on third-party representations.

What Are Potential Creditor Disputes?

Refund claims can trigger disputes over ownership, priority, and timing of recovery. Secured lenders may assert perfected interests in refund proceeds. Creditors may revisit distribution waterfalls once projected recoveries enter restructuring models. In contested cases, refund assets may shift negotiating leverage and prolong proceedings.

Practical Steps:

• Seek clarity regarding entitlement, timing, and valuation through early coordination among debtors, secured lenders, and trade counsel.
• Determine early whether refund proceeds fall within secured creditor collateral.
• Evaluate whether refund rights should be disclosed in first-day filings or schedules.
• Address ownership disputes early to avoid delaying recoveries.
• Consider whether refund claims should be pursued through a litigation trust or estate representative.

The collapse of the IEEPA-based tariff regime closes one chapter in trade policy. For restructuring professionals, it opens another. Professionals who create durable value are not necessarily ones who chase the largest refund. They will be those who capture legitimate recoveries while protecting the enterprise from the consequences of its own history.

This article originally appeared in Law360, March 2026.

Jonny Frank is a Partner at StoneTurn. He previously served as an executive assistant U.S. attorney for the Eastern District of New York.

Andrew Popescu is a Vice President at Province, where he advises on financial restructuring matters in the healthcare, industrial, consumer, and financial sectors

Laura Greenman is a Managing Director at StoneTurn, where she advises on compliance and forensic accounting matters for financial services and corporate clients.

If you have any questions or would like to discuss how StoneTurn can help, reach out to Jonny Frank, Laura Greenman, or Andrew Popescu.

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[i] See generally Jonny Frank & Laura Greenman,  10 Steps to Identify and Manage Tariff Risks and Opportunities (2025).

The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.