Bankruptcy 546(e) Safe Harbor Exemptions for Swaps, Securitized Loan Payments, LBO Shareholder Payments and More

Latest Developments in the Application of 546(e) to Financial Transactions and Securities Contracts

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, March 1, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will provide bankruptcy and finance practitioners with a solid understanding of the scope and limits of the safe harbor provisions for financial contracts. The panel will analyze lessons from recent case law and outline best practices for bringing and defending preference and fraudulent transfer actions as well as structuring these financial contracts to preserve safe harbor protections.

Description

As the safe harbor provisions for financial contracts continue to be tested in bankruptcy litigation, case law is constantly evolving. Recent key cases include the U.S. Supreme Court’s denial of cert. which preserved safe harbor protection for Madoff victims. In In re Hellas Telecomms (Luxembourg) II SCA, the New York Bankruptcy Court made it easier to challenge fraudulent transfers that fall under 546(e) protection as the court articulated a relaxed pleading standard for proving actual fraud.

Cases to watch in 2016 include the Sabine Oil bankruptcy case in which the debtor asserted a claim against its second-lien lenders who are seeking to dismiss the claim on the basis that the loan payments are protected under Section 546(e). Another key case is In re MCK Millennium Centre Parking L.L.C., in which the Illinois court vacated its landmark decision regarding safe harbor protections for securitized loans.

The ABI’s Commission to Study the Reform of Chapter 11 has made several recommendations impacting Section 546(e) namely the exclusion of LBO payments to owners of privately issued securities, the revision to definitions related to repurchase agreements, and the exclusion of ordinary supply contracts with little effect on financial markets.

Listen as our authoritative panel of bankruptcy attorneys discusses the scope and limits of the safe harbors, recent case law developments, best practices for bringing or defending fraudulent transfer safe harbor claims, and the structuring of financial contracts to preserve safe harbor protections.

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Outline

  1. Overview of Section 546 safe harbors
    1. Settlement payments
    2. Repurchase agreements
    3. Securities contracts
    4. Swap agreements
    5. Master netting agreements
  2. Recent case law developments
    1. Madoff Litigation
    2. In re Hellas Telecomms (Luxembourg) II SCA
    3. In re MCK Millennium Centre Parking L.L.C.
  3. Application of case law to structuring financial contracts and transactions to preserve safe harbor protections
  4. Brief summary of ABI’s recommendations of reforms for safe harbors exemptions

Benefits

The panel will review these and other key issues:

  • What trends have developed regarding the settlement payment safe harbor in leveraged buyout transactions?
  • How are ipso facto and bankruptcy clauses relevant to the safe harbor protections of the Code?
  • What recommendations has the ABI’s Commission to Study the Reform of Chapter 11 made with respect to Section 546(e) safe harbors?

Faculty

Mark D. Sherrill
Mark D. Sherrill
Partner
Sutherland Asbill & Brennan

Mr. Sherrill focuses his practice on counseling debtors and creditors in financial restructurings, litigation and...  |  Read More

Jason T. Rodriguez
Jason T. Rodriguez
Shareholder
Higier Allen & Lautin

Mr. Rodriguez practices corporate litigation and commercial bankruptcy at the Firm. Typical clients of his are banks,...  |  Read More

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