Blackstone, KFC Lose Appeals to Supreme Court
The Supreme Court won't stop Iowa from forcing KFC to pay nearly $250,000 in corporate income taxes, even though it had no restaurants or employees in the state.
The high court on Monday refused to hear an appeal from the fried-chicken giant, which a decision by that state's Supreme Court overturned. KFC is a unit of Yum! Brands .
All KFC restaurants in Iowa are independent franchises, whose owners pay KFC for the use of its logo and systems. But the Iowa Department of Revenue and Finance assessed the company more than $248,000 in unpaid corporate income taxes, including interest and penalties, in 2001. The taxes were for 1997 to 1999.
KFC said it doesn't owe Iowa taxes because it doesn't have property in the state. But Iowa judges have not agreed with that argument.
Separately, a lawsuit against Blackstone Group , which alleged the private equity firm failed to disclose problem investments before its 2007 initial public offering, will go ahead after the court rejected the company's appeal.
The justices refused to review whether a U.S. appeals court in New York used the wrong legal standard when it ruled that the lawsuit by investors could go forward. A federal judge initially dismissed the lawsuit.
The lawsuit alleges that New York-basedBlackstone failed to properly disclose a $331 millurt ruling would require companies, as part of an IPO, to "flood investors with unnecessary and confusing detail."
The plaintiffs said the appeals court ruling was correct and that there were no important policy concerns that merited Supreme Court review.
David Brower, an attorney for the investors, said Blackstone wanted "to alter corporate disclosure obligations by turning the clock back to pre-1933 days and return investors in public companies to an environment" of let the buyer beware.
The Supreme Court rejected the appeal without comment.