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Safe Harbors Commercial Bankruptcy

Jones Day

First Impressions: Seventh Circuit Rules that the Bankruptcy Code's "Safe Harbor" for Securities Contracts Transfers Applies to...

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Section 546(e) of the Bankruptcy Code's "safe harbor" preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings...more

Troutman Pepper

What Are Some Less Traditional Defenses to a Preference Action? - Creditor’s Rights Toolkit

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The ordinary course of business, new value, and contemporaneous exchange for new value defenses are the most frequently used defenses in a preference action. However, there are additional, less common defenses that a...more

King & Spalding

The Seventh Circuit Upholds District Court’s Decision That Safe Harbor Provision of Section 546(e) Applies to Privately Held...

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A recent ruling from the United States Court of Appeals for the Seventh Circuit provides additional comfort for lenders receiving full repayment in connection with leveraged acquisitions. The U.S. Bankruptcy Code gives...more

Patterson Belknap Webb & Tyler LLP

Seventh Circuit Addresses Scope of Section 546(e)

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

Jones Day

French Court Rules on Safe Harbor of Netting Agreements in Insolvency

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For the first time ever, a court in France has examined the compatibility of the statutory netting safe harbor with the French Constitution. The French High Court of Justice (Cour de cassation) addressed the preliminary...more

Cadwalader, Wickersham & Taft LLP

KYC – “Know Your Customer,” or Agent, or Financial Institution, to Qualify for the Bankruptcy Code Safe Harbors

Parties structuring certain financial transactions to comply with the Bankruptcy Code safe harbor provisions, including protections from the avoidance powers in Section 548 of the Bankruptcy Code, must be cognizant of recent...more

Jones Day

Second Circuit Adopts "Transfer-by-Transfer" Approach to Bankruptcy Code's Safe Harbor for Securities Contracts Payments

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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

Goodwin

Complicit Defendants Lose, Sovereign Agency Wins in Eternal Madoff Litigation

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Two recent decisions in the Madoff bankruptcy cases illustrate that the legacy of Bernie Madoff will long survive the man himself. Bernie Madoff died on April 14, 2021, while incarcerated in the Federal Medical Center in...more

Jones Day

Business Restructuring Review September-October 2023 | Vol. 22 No. 5

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Section 546(e) of the Bankruptcy Code’s “safe harbor” preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings...more

Jones Day

Court's Broad Interpretation of Definition of "Securities Contracts" Promotes Expansive Scope of Bankruptcy Code "Safe Harbor"

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Section 546(e) of the Bankruptcy Code's "safe harbor" preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings...more

A&O Shearman

Judge Drain Tackles Private Equity and Fraudulent Transfers in ‘Tops’ Decision

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On October 12, the Honorable Robert D. Drain, U.S. Bankruptcy Judge for the Southern District of New York, issued his final decision from the bench in the bankruptcy cases of supermarket chain Tops Holdings II Corporation...more

Morgan Lewis

Tribune: Lessons Learned and Relearned

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This is how Tribune ends: not with a bang, but a whimper. The 12-year litigation saga, rooted in the spectacular failure of the media and sports conglomerate’s 2007 leveraged buyout, reached an end in late February with a...more

McGuireWoods LLP

U.S. Supreme Court Declines Review Ending Shareholder Fraudulent Transfer Litigation in Tribune

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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

Jones Day

Another New York District Court Widens the Bankruptcy Code's Securities Contract Safe Harbor

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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

Jones Day

Business Restructuring Review | July-August 2021

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Chapter 15 Update: U.S. Bankruptcy Court Refuses To Enforce Order Approving Indonesian Debt Restructuring Plan Due To Third-party Releases - Cross-border bankruptcy cases filed in the U.S. under chapter 15 of the...more

Jones Day

Setoffs Under Shari'a-Compliant Investment Contracts Not Safe Harbored in Bankruptcy

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In In re Arcapita Bank B.S.C., 2021 WL 1603608 (Bankr. S.D.N.Y. Apr. 23, 2021), the U.S. Bankruptcy Court for the Southern District of New York addressed the interaction between purported setoff rights arising under...more

Jones Day

Business Restructuring Review | May–June 2021

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In This Issue: First Impressions: Third Circuit Scuttles Triangular Setoff in Bankruptcy - In In re Orexigen Therapeutics, Inc., 990 F.3d 748 (3d Cir. 2021), the U.S. Court of Appeals for the Third Circuit ruled as a...more

Jones Day

U.S. Supreme Court Declines Review of Landmark Tribune Safe Harbor Ruling

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On April 19, 2021, the U.S. Supreme Court declined to hear the appeal of a landmark 2019 decision issued by the U.S. Court of Appeals for the Second Circuit regarding the applicability of the Bankruptcy Code's safe harbor for...more

Jones Day

First Impressions: Third Circuit Scuttles Triangular Setoff in Bankruptcy

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The ability of a creditor to exercise its contractual, common law or statutory rights under non-bankruptcy law to set off amounts owed to a debtor in bankruptcy against the debtor's obligations to the creditor gives...more

Kramer Levin Naftalis & Frankel LLP

Delaware Bankruptcy Court Determines that Section 546(e) “Financial Participant” Does Not Exclude Debtors, Splitting from SDNY...

In a December 2020 decision, a Delaware Bankruptcy Court, in Kravitz v. Samson Energy Co. (In re Samson Res. Corp.), Nos. 15-11934 (BLS), 17-51524 (BLS), 2020 Bankr. LEXIS 3575, at *6 (Bankr. D. Del. Dec. 23, 2020), held that...more

Jones Day

New York District Court Expands the Scope of the Bankruptcy Safe Harbor for LBO Payments

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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

Faegre Drinker Biddle & Reath LLP

Second Circuit Holds That CDO Swap Payment Priority-Shifting Provisions Are Covered by Section 560 Safe Harbor

After nearly 10 years of litigation, the Second Circuit has weighed in on an appeal in an adversary proceeding arising out of the Lehman Brothers bankruptcy. The August 11, 2020, decision confirms that a trustee’s termination...more

Cadwalader, Wickersham & Taft LLP

Second Circuit’s Lehman Flip Clause Decision Continues the Expansion of the Bankruptcy Code Safe Harbors

On August 11, 2020, the United States Court of Appeals for the Second Circuit affirmed lower court decisions rejecting Lehman Brothers Special Financing Inc.’s (“LBSF”) attempt to recover nearly $1 billion in payments to...more

Orrick, Herrington & Sutcliffe LLP

Second Circuit Affirms Enforceability of Flip Provisions in Swap Agreements Under Bankruptcy Code Safe Harbor

For over a decade, Lehman Brothers Special Financing (“LBSF”) has been litigating the enforceability of so-called “flip clauses” in connection with the post-bankruptcy liquidation of swap agreements. These clauses, which are...more

Jones Day

Business Restructuring Review | July–August 2020

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In This Issue: Eighth Circuit Rules that Bankruptcy Code's Cap on Lease Damage Claims Applies to Fraudulent Transfer Judgment - In Lariat Cos. v. Wigley (In re Wigley), 951 F.3d 967 (8th Cir. 2020), the U.S. Court of...more

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