The Supreme Court was asked to resolve a split of circuits and decide whether the safe harbor provision of 11 U.S.C. Section 546(e) applies when a financial institution is only a “mere conduit.” The Supreme Court ruled unanimously in Merit Management Group LP v. FTI Consulting Inc. that the safe harbor under Section 546(e) applies only to “the transfer that the trustee seeks to avoid.” A transfer that is subject to recovery by a trustee as a constructively fraudulent transfe

The Southern District of Florida Bankruptcy Court is allowing a Chapter 7 Trustee to go forward with his adversary proceeding to avoid transfers that occurred in 2005, which are time-barred under applicable Florida law. The Court found that section 544(b) is clear and allows a trustee to step into the shoes of the IRS and to pursue avoidance actions that the IRS, outside of bankruptcy, could have timely pursued on the petition date. For full case opinion, click here. #Chapt