Storm Warning For Section 546 'Safe Harbor'

Law360, New York (February 4, 2014, 2:10 PM EST) -- Section 546(e) of the Bankruptcy Code limits the ability of a trustee or debtor-in-possession to avoid as a constructive fraudulent transfer or preferential transfer a transaction in which the challenged settlement payment was made through a stockbroker or a financial institution.

Because of the broad protection granted by Section 546(e) — the so-called “safe harbor” provision — parties structuring a leveraged buyout (LBO) or similar transaction often ensure that settlement funds flow through one of the listed institutions to inoculate the beneficiaries from a later challenge...
To view the full article, register now.

UK Financial Services

UK Financial Services

Read Our Latest UK Financial Services Coverage

Financial Services Law360 UK provides breaking news and analysis on the financial sector. Coverage includes UK and European Union policy, enforcement, and litigation involving banks, asset management firms, and other financial services organizations.