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

Church Joint Venture, L.P. V. Grusin (In re Blasingame)

(Sixth Circuit, Jan. 4, 2018)

The Sixth Circuit affirms the B.A.P.’s decision to reverse the bankruptcy court’s order for sanctions. The movant failed to satisfy the twenty-one day safe harbor in Rule 9011. Click here for the B.A.P. opinion. Opinion below.

Judge: Keith

Attorney for Appellant: Malone Akerly Martin, Bruce W. Akerly

Attorney for Appellee: Edward Michael Bearman, Gary E., Veazey

2018-01-04 – in re blasingame

Author: Matt Lindblom

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

(7th Cir. July 28, 2016)

The Seventh Circuit holds that the safe harbor provision of 11 U.S.C. § 546(e) does not apply to a transaction in which an entity that serves as merely a conduit for a pre-petition transfer is the only entity that fits one of the necessary categories of entities in that section. The conduit was a financial institution, which is a type of entity protected by § 546(e). However, neither the debtor nor the transferree were a type of entity that is protected. Thus, the court holds that the safe harbor provision does not apply and reverses the district court judgment. Opinion below.

Judge: Wood

Attorneys for Trustee: Reid Collins & Tsai LLP, Gregory S. Schwegmann

Attorneys for Defendant: Seyfarth Shaw LLP, Jason J. DeJonker, James B. Sowka

2016-07-28 – fti consulting v merit management

Author: Matt Lindblom