• How Will Section 546(E) Apply to Public Securities Transactions in Wake of Merit Management?
  • June 1, 2018 | Author: Trevor W. Swett
  • Law Firm: Caplin & Drysdale, Chartered - Washington Office
  • The Supreme Court's decision in Merit Management construes Section 546(e) of the Bankruptcy Code (11 USC § 546(e)) more narrowly than most lower courts have done before.(1) Often referred to as the securities 'safe harbour', this provision prevents a bankruptcy trustee from unwinding settlement payments or other transfers made in connection with securities contracts if the payments or transfers were "made by or to (or for the benefit of)" certain kinds of market participant, including any stockbroker or financial institution.(2)