2nd Circ. Denies Enron Appeal Of Securities Settlement

Law360, New York (June 28, 2011, 4:54 PM EDT) -- The Second Circuit refused Tuesday to force investment funds to return more than $50 million worth of commercial paper to a creditors recovery body for bankrupt energy giant Enron Corp.

In a 2-1 decision, the appeals court determined that the paper constituted settlement payments and were protected from avoidance actions under a safe harbor provision of the Bankruptcy Code. The ruling allows the funds — Alfa, S.A.B. de C.V., ING VP Balanced Portfolio Inc. and ING VP Bond Portfolio Inc. — to retain the commercial paper....
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