Bankruptcy Code—Section 546(e) Safe Harbor
Merit Management Group, LP v. FTI Consulting, Inc., No. 16-784
Merit Management Group, LP v. FTI Consulting, Inc., No. 16-784 (2018)
Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215
The Bankruptcy Code prohibits the discharge of “any debt . . . to the extent obtained by . . . actual fraud, other than a statement respecting the debtor’s . . . financial condition.” 11 U.S.C. § 523(a)(2). Circuit courts have split 3-3 as to whether a statement about a particular asset can qualify as a “statement respecting the debtor’s . . . financial condition.” The Supreme Court has agreed to resolve that split. Mayer Brown LLP represents the respondent.
PEM Entities LLC v. Levin, No. 16-492
Over the past several years, non-recourse receivables financing has been embraced by many major financial institutions and non-bank investors in the US market. With its (i) favorable regulatory treatment for regulated institutions, (ii) perceived positive risk/reward profile and (iii) adaptability to recent technological advancements such as distributed ledger technology (i.e., blockchain), non-recourse receivables financing likely will grow increasingly popular in the US market.
Merit Management Group, LP v. FTI Consulting, Inc., No. 16-784
Section 546(e) of the Bankruptcy Code, 11 U.S.C. § 546(e), protects certain prepetition payouts by or to financial institutions from clawback by the trustee of the ensuing bankruptcy estate. In particular, the safe harbor protects transfers made by a debtor by or to a broker, financial institution, or similar intermediary in connection with a “securities contract,” unless the transfer was made with actual intent to hinder, delay, or defraud creditors.
A bankruptcy judge in the Eastern District of California recently issued a decision that is sure to raise appellate eyebrows.
A complaint filed March 23 by the bankruptcy trustee for Lam Cloud Management, LLC in the United States Bankruptcy Court for the District of New Jersey challenges two small business financing models: (i) merchant cash advances (“MCAs”); and (ii) small business loans originated under bank partnerships.
U.S. Bank N.A. v. Village at Lakeridge, LLC, No. 15-1509
Czyzewski v. Jevic Holding Corp., No. 15-649 (2017)