Tabb Treatise Cited in SCOTUS Decision on Bankruptcy Code’s ‘Safe Harbor’ Provision
February 27, 2018
Of Counsel Charles Tabb’s treatise, The Law of Bankruptcy, was cited by the U.S. Supreme Court in a decision Tuesday holding that the only relevant transfer for purposes of the securities “safe harbor” provision in the bankruptcy code is the transfer that the trustee seeks to avoid, rather than the component parts of the transfer.
At issue in the case, Merit Management Group, LP v. FTI Consulting, Inc., was a circuit split over the scope of the bankruptcy code’s safe harbor provision exempting certain securities transactions from clawbacks.
The court, in a unanimous opinion by Justice Sonia Sotomayor, sided with the Seventh Circuit’s 2016 interpretation of the law, saying that when determining whether a transfer can be avoided in bankruptcy, courts should look at the overarching transfer instead of its component parts.
“The court concludes that the plain meaning of Section 546(e) dictates that the only relevant transfer for purposes of the safe harbor is the transfer that the trustee seeks to avoid,” the court wrote.
At issue in the case, Merit Management Group, LP v. FTI Consulting, Inc., was a circuit split over the scope of the bankruptcy code’s safe harbor provision exempting certain securities transactions from clawbacks.
The court, in a unanimous opinion by Justice Sonia Sotomayor, sided with the Seventh Circuit’s 2016 interpretation of the law, saying that when determining whether a transfer can be avoided in bankruptcy, courts should look at the overarching transfer instead of its component parts.
“The court concludes that the plain meaning of Section 546(e) dictates that the only relevant transfer for purposes of the safe harbor is the transfer that the trustee seeks to avoid,” the court wrote.
Related News
June 2, 2025
Press Releases
Foley Opens Nashville Office with Addition of Three Corporate Partners
Foley & Lardner LLP announced today the opening of its newest office in Nashville, Tenn., with the addition of three corporate partners to support the firm’s growing Health Care & Life Sciences and Manufacturing Sectors.
May 22, 2025
Press Releases
Foley Continues Expansion in California with Two Corporate Partners in Silicon Valley
Foley & Lardner LLP announced today that it has expanded its Innovative Technology Sector and Transactions Practice Group with the addition of partners Gurpreet Bal and Shaalu Mehra to the firm’s Silicon Valley office. Both attorneys bring substantial experience advising technology companies, investors, and founders on complex transactional and corporate matters.
May 12, 2025
Press Releases
Foley Expands East Coast Litigation Bench, Adds Three Partners in New York and Raleigh
Foley & Lardner LLP announced today that it has strengthened its East Coast presence with the addition of three partners to its Litigation Department.