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recent decision of the United States District Court for the Southern
District of New York affirmed a bankruptcy court decision holding that
section 546(e) of the Bankruptcy Code precluded a creditors committee from
avoiding an alleged preferential transfer under section 547(b) in which
the debtor paid more than $376 million to purchase and redeem a series of
private placement notes within ninety days of the bankruptcy filing.
In In re Quebecor World (USA) Inc., the court held that the
transfer was shielded from preference avoidance pursuant to two
independent safe harbors contained in section 546(e). The court’s
analysis highlights several important issues for debtors and creditors
involved in avoidance litigation because it affirms a broad reading and
literal application of the section 546(e) safe harbors, as guided by the
Second Circuit’s decision in In re Enron Creditors Recovery Corp. v.
Alfa, S.A.B. de C.V.
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