HHR Bankruptcy Report

Category Archives: Safe Harbor Provisions

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Just Passing Through: Merit Management Group, LP v. FTI Consulting, Inc.

Posted in Safe Harbor Provisions, SCOTUS
Next week, the Supreme Court will hear oral argument in Merit Management Group v. FTI Consulting to decide the correct way to apply the safe harbor of section 546(e) of the Bankruptcy Code.  The Court will review the Seventh Circuit’s decision splitting from the Second, Third, Sixth, Eighth and Tenth Circuits and holding that section… Continue Reading

Second Circuit Hears Arguments in Important Test of Safe Harbor Provisions

Posted in Chapter 11, Safe Harbor Provisions, Second Circuit
On November 5, 2014, the Second Circuit (Judges Winter, Droney, and Hellerstein) held oral arguments in In re Tribune Litigation (Case No. 13-3992) and Whyte v. Barclays Bank PLC (Case No. 13-2653).  As we outlined here, both cases consider the reach of the safe harbor provisions found in section 546 of the Bankruptcy Code that… Continue Reading

Safe Harbor Provisions Intact in Recent Seventh Circuit Decision

Posted in Chapter 11, Safe Harbor Provisions, Seventh Circuit
Participants in the securities and futures markets rely on the Bankruptcy Code’s safe harbor provisions to protect their transactions and assets when a counter-party enters bankruptcy.  Reliance on the safe harbor provisions, whose objective is to increase the overall stability of the financial markets, was tested by a recent decision of the District Court for… Continue Reading

Dance with the One that Brought You: Enforceability of Triangular Set-Off Provisions in Securities Contracts

Posted in Safe Harbor Provisions, Section 553
Parties to financial contracts often include in those contracts triangular setoff provisions to reduce risk in case of default by allowing one party to offset the debt owed by another party against the obligations to a third party.  Notwithstanding the customary nature of these setoff provisions, the mutuality requirement of Section 553 of the Bankruptcy… Continue Reading

Which Hat Hides the Ball?: Courts Test Extent of Safe Harbor Protections in Financial Transactions

Posted in Chapter 11, Safe Harbor Provisions
When a legal right depends on the capacity in which a party purports to act, it won’t be long before the lawyers are talking about “hats.”  In two bankruptcy cases now pending before the Second Circuit, the hat in question is that of the trustee under section 546 of the Bankruptcy Code and the right… Continue Reading