In a decision likely to have a knock-on effect for future fraudulent transfer defense and valuation litigation, the Delaware bankruptcy court recently ruled that the price agreed in the.
Gabe Vasquez was among a small number of Democrats to unseat incumbent House Republicans during the midterm elections. He defeated fossil fuel defender
Following an August 4, 2022 memorandum opinion from Judge Brendan L. Shannon of the United States Bankruptcy Court for the District of Delaware, a party to a safe harbored contract can.
Introduction
In a recent decision, the U.S. Bankruptcy Court for the District of Delaware (Shannon, J.) rejected an argument that the safe harbor provision of section 546(e) of the Bankruptcy Code is not available to debtors because section 101(22A)’s definition of “financial participant” excludes debtors. Instead, the court in
Kravitz v. Samson Energy Co., LLC (
In re Samson Res. Corp.), No. 15-11934 (BLS), 2020 WL 7700693 (Bankr. D. Del. Dec. 23, 2020) held that the term “financial participant” does not exclude debtors. In reaching its conclusion, the court conducted an in-depth textual analysis of the statute, ultimately settling on a “natural reading” and “plain text” interpretation. The court’s holding which is contrary to a decision by the U.S. District Court for the Southern District of New York may serve as useful precedent for debtors seeking to utilize the safe harbor provision of section 546(e) as an affirmative defense against avoidance acti
Statutory Background
Section 546(e) of the Bankruptcy Code, known as the “safe harbor” provision, shields specified types of payments from a bankruptcy trustee’s avoidance powers, including certain transfers “made by” a “financial participant” in connection with a “securities contract.” The scope of Section 546(e) has been the subject of extensive debate.
In re Samson Resources Corp. presented the specific question of whether a debtor can be considered a “financial participant” for the purposes of Section 546(e). In short, a “financial participant” is defined by Bankruptcy Code § 101(22A) as (A) an entity, (B) who has one or more required agreements, (C) in the required amounts, (D) with “the debtor or any other entity (other than an affiliate).”