Merit Management Group, LP v. FTI Consulting, Inc.

(U.S. Sup. Ct. Feb. 27, 2018)

The Supreme Court holds that the safe harbor of 11 U.S.C. § 546(e) applies only to the transfer that is sought to be avoided, and is not applicable based solely on intermediary transfers. Section 546(e) exempts from a trustee’s avoidance powers certain types of transfers (e.g., settlement payments as defined in § 101) to certain protected parties, including financial institutions. If the transfer sought to be avoided is between two non-protected parties, the safe harbor does not apply, even if there is an intermediary or conduit party that is a protected party. Opinion below.

Justice: Sotomayor

2018-02-27 – merit management v. fti consulting

Author: Matt Lindblom