Second Circuit Holds that "Settlement Payment" Safe Harbor Insulates Early Redemptions of Enron Commercial Paper from Fraudulent Transfer and Preference Attack | Practical Law

Second Circuit Holds that "Settlement Payment" Safe Harbor Insulates Early Redemptions of Enron Commercial Paper from Fraudulent Transfer and Preference Attack | Practical Law

An update on the US Court of Appeals for the Second Circuit's decision in an adversary proceeding relating to the Enron bankruptcy. The Second Circuit held that an issuer's premature redemption of its commercial paper, through the Depository Trust Company, constitutes a "settlement payment" under the Bankruptcy Code without regard to extrinsic facts about the nature of the transactions, the motive behind the transactions or how the payments are made.

Second Circuit Holds that "Settlement Payment" Safe Harbor Insulates Early Redemptions of Enron Commercial Paper from Fraudulent Transfer and Preference Attack

by PLC Finance
Published on 05 Jul 2011 • USA (National/Federal)
An update on the US Court of Appeals for the Second Circuit's decision in an adversary proceeding relating to the Enron bankruptcy. The Second Circuit held that an issuer's premature redemption of its commercial paper, through the Depository Trust Company, constitutes a "settlement payment" under the Bankruptcy Code without regard to extrinsic facts about the nature of the transactions, the motive behind the transactions or how the payments are made.