Thanks to the U.S. Supreme Court and the Ninth Circuit Court of Appeals I can plug two of my published articles.
Starting with SCOTUS, the just-issued decision in Merit Management Group LP v. FTI Consulting, Inc. addressed the mysterious but powerful "safe-harbor" provision of § 546(e) of the Bankruptcy Code. Inserted by Congress to enhance the stability of so-called financial contracts, this section permits banks and other financial intermediaries to keep all of a payment from a bankrupt company even though other creditors would have to repay it as a preferential transfer if they received it within 90 days of bankruptcy. In other words, banks, not debtors (and their general creditors), are sometimes preferred. Correctly I believe, in a 9-0 opinion SCOTUS interpreted this exception statute narrowly. Anyone interested in the esoteric world of financial contracts can read my simplified explanation in A Fable of Financial Contracts: A Guide for the Perplexed by going here.
Moving west, the Ninth Circuit reversed itsearlier decision and held in S&H Packing & Sales Co. v. Tanimura Distributing, Inc. that everyone's favorite pro-farmer legislation, the Perishable Agricultural Commodities Acts (PACA), was more pro-farmer (and anti-lender) than before. The bottom line: only true purchasers of a wholesaler's accounts will take free from the statutory "trust" created by PACA. Want to know more? Read my long-ago piece, The Interaction Between the Perishable Agricultural Commodities Act and the Bankruptcy Code: Another Trap for the Unwary by going here. While I don't like PACA as policy, I think the Ninth Circuit got it right this time.
Starting with SCOTUS, the just-issued decision in Merit Management Group LP v. FTI Consulting, Inc. addressed the mysterious but powerful "safe-harbor" provision of § 546(e) of the Bankruptcy Code. Inserted by Congress to enhance the stability of so-called financial contracts, this section permits banks and other financial intermediaries to keep all of a payment from a bankrupt company even though other creditors would have to repay it as a preferential transfer if they received it within 90 days of bankruptcy. In other words, banks, not debtors (and their general creditors), are sometimes preferred. Correctly I believe, in a 9-0 opinion SCOTUS interpreted this exception statute narrowly. Anyone interested in the esoteric world of financial contracts can read my simplified explanation in A Fable of Financial Contracts: A Guide for the Perplexed by going here.
Moving west, the Ninth Circuit reversed itsearlier decision and held in S&H Packing & Sales Co. v. Tanimura Distributing, Inc. that everyone's favorite pro-farmer legislation, the Perishable Agricultural Commodities Acts (PACA), was more pro-farmer (and anti-lender) than before. The bottom line: only true purchasers of a wholesaler's accounts will take free from the statutory "trust" created by PACA. Want to know more? Read my long-ago piece, The Interaction Between the Perishable Agricultural Commodities Act and the Bankruptcy Code: Another Trap for the Unwary by going here. While I don't like PACA as policy, I think the Ninth Circuit got it right this time.
No comments:
Post a Comment