Seventh Circuit Applies Safe Harbor to Private Securities Transaction

In his latest article for The Bankruptcy Strategist titled, “Seventh Circuit Applies Safe Harbor to Private Securities Transaction,” Schulte Roth & Zabel of counsel Michael L. Cook discusses the Seventh Circuit's decision in Petr v. BMO Harris Bank, N.A.

“… [T]he term ‘securities contract’ as used in [Bankruptcy Code] §546(e) unambiguously includes contracts involving privately held securities.” Petr v. BMO Harris Bank, N.A., (In re BWGS, LLC), 2024 WL 113217, *6 (7th Cir. Mar. 15, 2024). Affirming the district court’s reversal of the bankruptcy court, the court also held that “§546(e) preempts” the bankruptcy trustee’s “proffered” state law fraudulent transfer claims. Id. at *10.

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