A group of creditors from the Tribune Media Co.'s 2008 bankruptcy cannot recover money paid to the defunct firm's investors in leveraged buyout before the company filed for Chapter 11 protection in Delaware, the U.S. Court of Appeals for the Second Circuit ruled Thursday.

A three-judge panel of the Manhattan-based appeals court said that the creditors' state law claims for constructive fraudulent conveyance were preempted by a provision of U.S. bankruptcy law, which protects certain transactions involving securities contracts.

The U.S. Supreme Court last year narrowed the scope of the Section 546(e) safe harbor to exclude certain fraudulent transfers made through the "conduit" of a financial institution to a third party, giving new hope to creditors claiming that billionaire Samuel Zell's 2007 leveraged buyout had overpaid investors in exchange for returning their shares to Tribune.