Back to square one: How Tribune revived the settlement payment safe harbor to trustee avoidance powers in the context of leveraged buyouts
Creighton Authors
Fox, Irina
Fox, Irina
Admin. Units
School of Law
School of Law
Subjects
Bankruptcy;
Bankruptcy;
Title
Back to square one: How Tribune revived the settlement payment safe harbor to trustee avoidance powers in the context of leveraged buyouts
Back to square one: How Tribune revived the settlement payment safe harbor to trustee avoidance powers in the context of leveraged buyouts
Authors
Fox, Irina
Fox, Irina
Journal
Norton Journal of Bankruptcy Law and Practice
Norton Journal of Bankruptcy Law and Practice
Volume
29
Issue
4
Pages
295-329
29
Issue
4
Pages
295-329
Date
2020, August
2020, August
Metadata
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Citation
Irina Fox, Back to Square One: How Tribune Revived the Settlement Payment Safe Harbor to Trustee Avoidance Powers in the Context of Leveraged Buyouts, 29 NORTON J. BANKR. L. & PRAC. 295 (2020).
Irina Fox, Back to Square One: How Tribune Revived the Settlement Payment Safe Harbor to Trustee Avoidance Powers in the Context of Leveraged Buyouts, 29 NORTON J. BANKR. L. & PRAC. 295 (2020).
Abstract
This Article reviews the history of the Code section 546(e) safe harbor, highlighting the circuit split that was resolved by Merit Management. The Article then focuses on the current framework for the analysis, as it was articulated in Tribune. It reviews case law on the interpretation of statutory terms such as "financial institution," "settlement payment," and securities contract." The Article highlights why public securities transactions need protection, whereas transfers of securities of closely held companies should be subject to avoidance. Finally, to prevent further uncertainty regarding the application of the statute, the Article suggests that Congress amend section 546(e). The settlement payment safe harbor should shield from avoidance only transactions involving public markets of securities. That was the original purpose for the safe harbor.