Fraudulent Transfer Claw-Back Litigation Post Tribune, Lyondell and SemGroup

Litigating Avoidance Actions Under the Bankruptcy Code and State Law Constructive Fraudulent Transfer Statutes

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

Conducted on Thursday, June 1, 2017
Recorded event now available

This CLE webinar will provide counsel with a review of fraudulent transfer claw-back litigation in light of rulings in the Tribune, Lyondell and SemGroup bankruptcy cases, as well as more recent cases from the Bankruptcy Court for the District of Delaware and the Seventh Circuit Court of Appeals that buck the trend of courts’ expansive readings of the Section 546(e) “safe harbor”. The program will discuss whether the state law fraudulent transfer claims not pursued by a bankruptcy estate representative could be deemed to have reverted to creditors in order to circumvent bankruptcy safe harbor provisions.


The limits of fraudulent transfer litigation were tested in matters arising from the Tribune, Lyondell and SemGroup bankruptcy cases where issues relating to rights of creditors to bring state law fraudulent transfer claims when the bankruptcy estate representative had not brought such claims were analyzed.

In a long-awaited decision, the Second Circuit in 2016 denied the Tribune creditors the right to claw back $8.3 billion that stockholders received prior to the leveraged buyout of the company on a constructive intent fraudulent transfer theory. The court held that Section 546(e) of the Code “preempted” the claim, despite the expiration of the two-year statute of limitations and the fact that claims were brought under state law by creditors, and not the bankruptcy estate representative.

Similar claims of automatic reversion of fraudulent conveyance claims to creditors were made in the Lyondell case. The Second Circuit’s ruling in Tribune is contrary to the earlier Bankruptcy Court ruling in Lyondell. In a summary order accompanying the Tribune case, the Second Circuit affirmed dismissal of a state law claim by the litigation trustee applying the Tribune rationale. Petitions for certiorari to the Supreme Court of the United States with respect to the Second Circuit’s Tribune and SemGroup decisions are currently pending.

Listen as our authoritative panel of bankruptcy attorneys discusses fraudulent transfer claw-back litigation post Tribune. The panel will discuss the potential reversion to creditors of state law fraudulent transfer claims abandoned in bankruptcy and arguments supporting/defending against such state law claims. The panel will also discuss the applicability of the bankruptcy safe harbor provisions to such claims.


  1. Overview of Section 546(e)
  2. Overview of the Tribune fraudulent conveyance ruling
  3. Impact on Lyondell of the Tribune ruling
  4. Automatic reversion of state law claims to creditors
  5. Applicability of safe harbor defenses to certain claims
  6. The fraudulent transfer claims not protected by the safe harbor provision (federal actual intent fraudulent transfer claims)


The panel will review these and other key issues:

  • What are arguments supporting/defending the reversion to creditors of state law fraudulent transfer claims abandoned in bankruptcy?
  • How have the recent bankruptcy litigation rulings clarified the applicability of the bankruptcy safe harbor provisions to state law fraudulent transfer claims?


Michael R. Handler, Esq.
King & Spalding, New York

Mr. Handler specializes in representing lenders and bondholders in all aspects of workout and restructuring matters. Mr. Handler also has significant experience representing financial institutions, institutional investors and large corporations in commercial finance transactions, mergers & acquisitions and other corporate transactions.

Arthur J. Steinberg, Partner
King & Spalding, New York

Mr. Steinberg is a senior financial restructuring partner with 36 years of practice representing examiners, trustees, corporate monitors, debtors, creditors’ committees, secured and unsecured creditors groups/individuals, distressed investors and asset buyers, and parties to bankruptcy related litigation. He is a frequent author and lecturer on bankruptcy law topics.


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Bankruptcy Law Advisory Board

Mark N. Berman

Adjunct Professor

Northeastern University

Michael E. Foreman



Matthew Gensburg


Greenberg Traurig

Brian E. Greer



Douglas Lipke


Vedder Price

Victor Milione


Nixon Peabody

Steven B. Smith

Senior Consultant

JND Corporate Restructuring

Michael Solow


Kaye Scholer

Robert A. Weber


Skadden Arps Slate Meagher & Flom

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