Zone of Insolvency

Zone of Insolvency

Tag Archives: Avoidance Actions

SCOTUS Determines That 546(e) Safe Harbor Does Not Protect Transfers Where Financial Institution Is A Mere Conduit

Posted in U.S.
In a decision significantly impacting the ability of a plaintiff to prosecute avoidance actions, the United States Supreme Court, in Merit Management Group, LP v. FTI Consulting, Inc., 583 U.S. ___ (2018), unanimously held that a transfer of funds, where a financial institution served as a mere conduit, does not entitle the recipient of the… Continue Reading

Second Circuit Applies Safe Harbor to Protect Withdrawals Made by Madoff Customers

Posted in U.S.
Focusing on the plain language provided in Bankruptcy Code section 546(e), the Court of Appeals for the Second Circuit this week held that customers of the now defunct Bernard Madoff Investment Securities LLC can retain funds they had withdrawn from their customer accounts before the Madoff firm was placed into liquidation.  Irving Picard, the trustee… Continue Reading

Sidestepping the Section 546(e) Safe Harbor

Posted in U.S.
A recent decision issued by the U.S. District Court for the Southern District of New York multi-district litigation In re Tribune Company may have altered the landscape for litigating avoidance actions and narrowed the Bankruptcy Code’s “safe harbor” protections against the avoidance of settlement or swap payments. Section 546(e) of the Bankruptcy Code prevents a… Continue Reading