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We have previously blogged about the section 546(e) defense to a trustee’s avoidance powers under the Bankruptcy Code. A trustee has broad powers to set aside certain transfers made by debtors before bankruptcy. See 11 U.S.C....more
The scope of the Bankruptcy Code's "safe harbor" shielding certain securities, commodity, or forward-contract payments from avoidance as fraudulent transfers has long been a magnet for controversy, particularly after the U.S....more
Delaware Judge Brendan Shannon has joined calls for reforming Section 546(e) of the bankruptcy code, echoing concerns that the section’s safe harbor from fraudulent transfer liability has allowed investors to “loot privately...more
After more than a decade, litigation resulting from the failed leveraged buyout (LBO) of media giant Tribune Company has finally drawn to a close. On Feb. 22, 2022, the U.S. Supreme Court declined to review the latest...more
In 2019, the U.S. Court of Appeals for the Second Circuit made headlines when it ruled that creditors' state law fraudulent transfer claims arising from the 2007 leveraged buyout ("LBO") of Tribune Co. ("Tribune") were...more
We have blogged previously about section 546(e), the Bankruptcy Code’s safe harbor for certain transfers otherwise subject to avoidance as preferences or fraudulent transfers. See 11 U.S.C. § 546(e). Among the transfers...more
As we had anticipated in our prior client alerts, the “customer” safe harbor defense to constructive fraudulent conveyance claims challenging securities transactions — which was flagged by the U.S. Supreme Court in Merit...more
In In re Tribune Co. Fraudulent Conveyance Litig., 2019 WL 1771786 (S.D.N.Y. Apr. 23, 2019), the U.S. District Court for the Southern District of New York denied a litigation trustee’s motion to amend a complaint seeking to...more
In its ruling in FTI Consulting, Inc. v. Sweeney (In re Centaur, LLC), the United States Bankruptcy Court for the District of Delaware addressed the Supreme Court’s recent clarification of the scope of Bankruptcy Code Section...more
On April 3, 2018, the U.S. Supreme Court issued an order that, in light of its recent ruling in Merit Management Group LP v. FTI Consulting Inc., 138 S. Ct. 883, No. 16-784 (Feb. 27, 2018), the Court would defer consideration...more
In a unanimous decision in Merit Mgmt. Grp., LP v. FTI Consulting, Inc., the U.S. Supreme Court addressed the scope of a Bankruptcy Code exception to the “avoiding powers” of a bankruptcy trustee or Chapter 11...more
The Bankruptcy Code gives a bankruptcy trustee, or the debtor in possession, the power to “avoid” certain transfers made by the debtor at various times before filing for bankruptcy relief. Congress provided a number of...more
On February 27, 2018, the U.S. Supreme Court resolved a circuit split under the Bankruptcy Code and determined that where funds passed through financial institutions acting as payment conduits, where the ultimate transfer...more
In a case that could have significant, long-term ramifications for the holders of stock and other securities, the U.S. Supreme Court vastly limited the scope of a Bankruptcy Code “safe harbor” that shields certain transfers...more
Recently, the United States Supreme Court decided Merit Management Group, LP v. FTI Consulting, Inc., a decision that has potentially far-reaching implications for a broad range of business transactions, particularly...more
The U.S. Supreme Court issued a highly anticipated ruling resolving a long-standing circuit split over the scope of the Bankruptcy Code's "safe harbor" provision exempting certain securities transaction payments from...more
• In a unanimous decision, the U.S. Supreme Court ruled against the petitioner in Merit Management Group, LP, Petitioner v. FTI Consulting, Inc., affirming the decision of the U.S. Court of Appeals for the Seventh Circuit. ...more
Last week, the unanimous Supreme Court clarified that the “clearing and settlement” exception to a bankruptcy trustee’s avoiding powers covers only payments “to,” not merely through, financial market participants....more
The Supreme Court’s recent decision in Merit Management Group, LP v. FTI Consulting, Inc. has the potential to dramatically change how the safe harbor contained in § 546(e) will be applied to avoidance actions brought under...more
The Bankruptcy Code allows trustees, as well as debtors-in-possession and in some circumstances creditors’ committees, to set aside and recover certain transfers for the benefit of the bankruptcy estate. The purpose of the...more
Title 11 of the U.S. Bankruptcy Code contains provisions that allow some pre-bankruptcy transfers to be avoided, or "unwound," by a debtor in possession, trustee, or other party granted standing to do so. ...more
On February 27, 2018, the Supreme Court handed down a unanimous opinion, authored by Justice Sotomayor, resolving a Circuit split over the interpretation of Section 546(e) of the Bankruptcy Code, the “safe harbor” provision...more
On Feb. 27, 2018, the Supreme Court handed down a unanimous opinion, authored by Justice Sotomayor, resolving a Circuit split over the interpretation of Section 546(e) of the Bankruptcy Code, the “safe harbor” provision that...more
On March 24, 2016, the U.S. Court of Appeals for the Second Circuit (the “Court”) ruled that former shareholders of the debtor Tribune Media Company (“Tribune”), who were cashed out in a leveraged buyout (“LBO”), would be...more