Merit Management Group Knocks the Doors of the Supreme Court in $16.5M Centaur Ch. 11 Clawback
January 5, 2017, New York – Merit Management Group, LLC, a former shareholder of a racetrack and casino operator, Centaur LLC, recently petitioned the U.S. Supreme Court to hear its appeal. Last year, the Seventh Circuit held that §546(e) safe harbor does not protect transfers that are conducted through financial institutions (or the other entities mentioned under §546(e)), where the entity is neither a debtor nor a transferee but only the conduit. Merit alleged that the Seventh Circuit misinterpreted the section of the bankruptcy code that protects certain prepetition payouts “by or to” financial institutions from clawback. Merit asserted that the Seventh Circuit decision is wrong in at least three respects as – it disregards the plain language of the statute; it mistakes breadth for ambiguity; it substitutes the court’s understanding of Congress’ principal goals for language that Congress chose to implement its objective.
Earlier, Merit had sought review by filing a petition for rehearing en banc, but the Court denied Merit’s petition for rehearing. The current underlying case is Merit Management Group LP v. FTI Consulting Inc., case number 16-784, in Supreme Court of the United States
Neither Intent nor Motive of the Parties is Relevant Under § 547(b).
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