By J.R. Smith and Shannon Daily (June 1, 2018, 1:46 PM EDT) -- In Merit Management Group LP v. FTI Consulting Inc.,[1] the U.S. Supreme Court scrutinized the proper application of the safe harbor found in U.S. Bankruptcy Code[2] Section 546(e), which protects from avoidance certain transfers made in connection with securities, commodity and forward contracts. Resolving a circuit split,[3] the Supreme Court held that Section 546(e) only protects from avoidance qualifying transfers by and to entities enumerated in Section 546(e) and does not protect transfers that merely pass through such entities. While the Supreme Court's decision seemingly narrowed the reach of the safe harbor, it did little to change the landscape for the multibillion-dollar U.S. structured finance industry, including warehouse lending....
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