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Seventh Circuit Limits Bankruptcy Safe Harbor Protection
Westlaw Journal – Bankruptcy
September 22, 2016
The safe harbor protection of Bankruptcy Code (“Code”) § 546(e) does not protect “transfers that are simply conducted through financial institutions,” held the U.S. Court of Appeals for the Seventh Circuit on July 28, 2016. FTI Consulting Inc. v. Merit Management Group LP, 2016 WL 4036408, *1 (7th Cir. July 28, 2016). Because the debtor’s transfer of funds to the transferee passed through a financial institution acting only as a conduit that was not one of the parties covered by § 546(e) (i.e., “commodity broker, forward contract merchant, stockbroker, financial institution, financial participant, or securities clearing agency”), the asserted fraudulent transfer was not protected by § 546(e) and was thus recoverable, said the court when reversing the district court’s dismissal of the trustee’s claim. In this article, of counsel Michael Cook and former Schulte lawyer David Hillman discuss the Seventh Circuit's decision to limit the application of the safe harbor protection in the Bankruptcy Code.
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The US Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) have overhauled Form PF and private fund managers have until March 12, 2025, to begin reporting on the new Form. The changes to the reporting requirements mandated by the amendments to the Form (“Form PF Amendments”) will require substantial preparation by many managers.[1]
Alerts
The US Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”) have overhauled Form PF and private fund managers have until March 12, 2025, to begin reporting on the new Form. The changes to the reporting requirements mandated by the amendments to the Form (“Form PF Amendments”) will require substantial preparation by many managers.[1]