Financial Institutions, Fraudulent Transfers, Creditors

Trustee’s Suit Seeking Clawback of Bank Fees as Fraudulent Transfers Survives Summary Judgment

King & Spalding on 5/21/2025

On March 12, 2025, the U.S. Bankruptcy Court for the District of Delaware denied four banks’ motion for summary judgment in an action seeking to claw back $35 million in fees associated with a $1.8 billion loan that allegedly...more

Seventh Circuit Addresses Scope of Section 546(e)

Patterson Belknap Webb & Tyler LLP on 4/1/2024

We have previously blogged about the section 546(e) defense to a trustee’s avoidance powers under the Bankruptcy Code. A trustee has broad powers to set aside certain transfers made by debtors before bankruptcy. See 11 U.S.C....more

Fifth Circuit Holds Avoidance Actions Can Be Sold

Dorsey & Whitney LLP on 2/20/2024

Joining the Eighth and Ninth Circuit Courts of Appeals, the Fifth Circuit Court of Appeals recently held that a debtor or trustee can sell its avoidance actions to third-party, non-estate representatives. See Briar Capital...more

Former Tribune Shareholders Still Merit Safe Harbor Upon Revision

Patterson Belknap Webb & Tyler LLP on 1/31/2020

We have noodled on the impact that the Supreme Court’s decision in Merit Management Group, LP v. FTI Consulting, Inc., which held that the safe harbor provided in Section 546(e) of the Bankruptcy Code does not apply when the...more

Second Circuit Recognizes ‘Customer’ Safe Harbor in Tribune LBO Litigation

Skadden, Arps, Slate, Meagher & Flom LLP on 1/14/2020

As we had anticipated in our prior client alerts, the “customer” safe harbor defense to constructive fraudulent conveyance claims challenging securities transactions — which was flagged by the U.S. Supreme Court in Merit...more

Tribune District Court Rules That LBO Payments May Not Be Avoided Because Debtor Was "Customer" of "Financial Institution"

Jones Day on 6/19/2019

In In re Tribune Co. Fraudulent Conveyance Litig., 2019 WL 1771786 (S.D.N.Y. Apr. 23, 2019), the U.S. District Court for the Southern District of New York denied a litigation trustee’s motion to amend a complaint seeking to...more

Bankruptcy Code’s Safe Harbor Defense Eliminated by Supreme Court; Variant Defense May Survive

Skadden, Arps, Slate, Meagher & Flom LLP on 4/26/2018

In a unanimous decision in Merit Mgmt. Grp., LP v. FTI Consulting, Inc., the U.S. Supreme Court addressed the scope of a Bankruptcy Code exception to the “avoiding powers” of a bankruptcy trustee or Chapter 11...more

Fraudulent Transfer Act: Be Wary Of The Uncollectable Judgment Debtor

Amundsen Davis LLC on 1/29/2018

Financial institutions that become judgment creditors should always take a hard look at a judgment debtor’s financials and assets after getting a judgment against them. This is especially the case if the financial institution...more

Financial Institutions › Fraudulent Transfers › Creditors

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