Tag Archives: safe harbor

Bankruptcy Court for Southern District of New York Prohibits Triangular Setoff Provided for in Safe Harbored Contract

On October 4, 2011, the United States Bankruptcy Court for the Southern District of New York ruled that a contractual right of a triangular (non-mutual) setoff was unenforceable in bankruptcy, even though the contract was safe harbored. In re Lehman Brothers, Inc., No. 08-01420 (JMP), 2011 WL 4553015 (Bankr. S.D.N.Y. Oct. 4, 2011). In doing so, Judge Peck followed prior decisions by the Delaware bankruptcy and district courts in In re SemCrude, L.P., 399 B.R. 388 (Bankr. D. Del. 2009), aff’d, 428 B.R. 590 (D. Del. 2010) and his own decision in In re Lehman Brothers Holdings Inc., 433 B.R. 101 (Bankr. S.D.N.Y. 2010) (“Swedbank”). Continue reading

Bankruptcy Bullets – Official Comm. of Unsecured Creditors of Quebecor World (USA) Inc. v. Am. United Life Ins. Co. (In re Quebecor World (USA) Inc.), Adv. Proc. No. 08-01417 (Bankr. S.D.N.Y)

On July 27, 2011, in an adversary proceeding brought by the Creditors’ Committee against certain of the Debtor’s noteholders, Bankruptcy Judge James M. Peck held that a $376 million prepetition redemption payment made by the Debtor to noteholders did not constitute an avoidable preference. Instead, the payment was a safe-harbored “settlement payment” under section 546(e) of the Bankruptcy Code. Continue reading

S.D.N.Y. Bankruptcy Court Continues to Construe Bankruptcy Code’s Safe Harbor Provisions Narrowly

In two recent decisions, the United States Bankruptcy Court for the Southern District of New York has interpreted narrowly certain of the Bankruptcy Code’s safe harbor provisions. Continue reading