• The Second Circuit Interprets the Bankruptcy Code’s Safe Harbor Provisions More Broadly than the Bankruptcy Court
  • August 2, 2011 | Authors: Dennis J. Connolly; William S. Sugden; Jason H. Watson; John C. Weitnauer; David A. Wender
  • Law Firm: Alston & Bird LLP - Atlanta Office
  • The Second Circuit Court of Appeals has now weighed in on the Bankruptcy Code’s safe harbor provisions. In Enron Creditors Recovery Corp. v. Alfa, S.A.B. de C.V., Docket Nos. 09-5122, 09-5142, 2011 WL 2536101 (2d Cir. June 28, 2011), the Second Circuit Court of Appeals faced an issue of first impression—whether Section 546(e) of the Bankruptcy Code, which shields certain payments from avoidance actions in bankruptcy, extends to an issuer’s payment to redeem its commercial paper made before maturity. Specifically, the Enron Creditors Recovery Corporation (ECRC) sought to avoid and recover payments made by Enron to redeem certain notes that Enron had issued.