A recent federal district court decision has broadly interpreted the safe harbor in §546(e) of the Bankruptcy Code to insulate payments made to redeem commercial paper. District Judge Colleen McMahon reversed the bankruptcy court and held that the §546(e) safe harbor, barring the avoidance of transfers constituting settlement payments in connection with securities transactions, extends also to an issuer’s redemption of commercial paper prior to maturity.1
Background
The Bankruptcy Code allows a trustee or debtor-in-possession to avoid preferential and fraudulent transfers of the debtor’s property and claw-back either the property transferred or its value.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
