We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
SECTION 546(E) REDUX-THE PROPER FRAMEWORK FOR THE CONSTRUCTION OF THE TERMS FINANCIAL INSTITUTION AND FINANCIAL PARTICIPANT CONTAINED IN THE BANKRUPTCY CODE AFTER THE U.S. SUPREME COURT'S HOLDING IN MERIT.
- Authors
Marchetti, Peter V.
- Abstract
This Article discusses and analyzes the proper framework for the construction » . r of the terms "financial institution and financial participant» as defined in Sections 101(22)(A) and 101(22A) of the Bankruptcy Code (the Code), as they work in tandem with Section 546(e) of the Code. In 2018, the U.S. Supreme Court issued its long awaited decision in Merit, which held that the language regarding transfers "made by or to (or for the benefit 00 ... a-Bnancial institution" contained in Section 546fr) does not insulate the ultimate transferee of a constructivefraudulent action (a CFTA) simply because the company being acquired (the Target) through the leveraged buyout (an LBO) uses a bank as an intermediary between itse(f and its redeeming shareholders (Redeeming Shareholders). Merit stated that in such a transaction, for purposes of fraudulent transfer law and Section 546(e), the Target, not the intermediary bank, is the "transferor. Likewise, Merit stated that the Redeeming Shareholder, as the ultimate recipient of the transfer. is the "transfeTee." Merit concluded that Section 546(e) does not insulate a Redeeming Shareholder from a CFTA simply because a bank or similar entity acted as an intermediary between the Target and the Redeeming Shareholder.
- Subjects
FINANCIAL institutions; UNITED States. Supreme Court; BANKRUPTCY; LEVERAGED buyouts; STOCKHOLDERS; FRAUDULENT conveyances
- Publication
Cardozo Law Review, 2022, Vol 43, Issue 3, p1107
- ISSN
0270-5192
- Publication type
Article