Mr Trevor Swett

Trevor Swett


Insolvency & Restructuring

How will Section 546(e) apply to public securities transactions in wake of Merit Management?
USA | 25 May 2018

The Supreme Court's decision in Merit Management construes Section 546(e) of the Bankruptcy Code more narrowly than most lower courts have done before. 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.

Supreme Court to consider statutory safe harbour for debtors' pre-petition securities transactions
USA | 29 September 2017

In an upcoming case, the Supreme Court will address the question of whether the Bankruptcy Code bars a bankruptcy trustee from avoiding a debtor's constructively fraudulent pre-petition securities transactions merely because the deal was executed through a financial intermediary with no stake of its own in the transaction. The issue turns on the meaning of Section 546(e) of the Bankruptcy Code.

Supreme Court to review priority-skipping settlement and structured dismissal of Chapter 11 case
USA | 05 August 2016

The Supreme Court will soon consider whether a Chapter 11 debtor in dire straits can settle claims of the bankruptcy estate, receive court approval to distribute the settlement proceeds to junior creditors without paying priority claims and then obtain dismissal of the bankruptcy case on terms that leave the priority-skipping settlement intact, or whether such a resolution violates essential aspects of the Bankruptcy Code.

Do Bankruptcy Code clawback provisions reach transactions occurring in other countries?
USA | 17 June 2016

In a world of free-ranging capital and cross-border transactions, the question of whether US courts will apply US law to transactions taking place in other countries is important. It is therefore a matter of both interest and concern that judges in the Southern District of New York have reached opposite conclusions when asked to give extraterritorial effect to the avoidance or 'clawback' provisions of the Bankruptcy Code.

Court holds that Bankruptcy Code pre-empts state laws invoked by creditors to avoid LBO payments
USA | 06 May 2016

The US Court of Appeals recently decided in In re Tribune Co Fraudulent Conveyance Litigation that Section 546(e) of the Bankruptcy Code impliedly pre-empts state fraudulent conveyance laws that creditors might otherwise use to unwind payments made by a corporate debtor to public shareholders in a pre-bankruptcy leveraged buy-out. The court so held even though Section 546(e) in terms applies to claims only by a bankruptcy 'trustee'.

Seventh Circuit rules on authority to temporarily stay non-debtor litigation
USA | 25 March 2016

The US Court of Appeals for the Seventh Circuit recently reviewed a bankruptcy court's denial of a trustee's motion for a temporary injunction staying litigation between non-debtors. The court accepted the premise that the bankruptcy proceeding and the lenders' suits did not involve "the same claims". However, it held that the lower courts had construed too narrowly the equitable powers conferred by Section 105(a) of the Bankruptcy Code.

Supreme Court to rule on adjudicatory authority of bankruptcy judges
USA | 17 January 2014

In a case to be decided this term, the Supreme Court will confront questions arising in a bankruptcy trustee's fraudulent conveyance action that go to the scope and meaning of its much-noted decision in Stern v Marshall: may a party to a dispute that the Constitution assigns to Article III courts consent by implication to entry of final judgment by a bankruptcy judge, who by definition sits outside of Article III?