Seventh Circuit Reversal of Grede v. FCStone, LLC Shields Cash Payments to Customers of Sentinel Under § 546(e) Safe Harbor

On March 19, 2014, the U.S. Court of Appeals for the Seventh Circuit ruled that pre- and post-petition cash transfers from investment management firm Sentinel Management Group, Inc. (“Sentinel”) to futures commission merchant FCStone, LLC (“FCStone”) are protected from avoidance, while recognizing that the illegal actions of Sentinel’s managers makes this case unprecedented.