Section 546(e) of the bankruptcy code prohibits a bankruptcy trustee from avoiding “settlement payment[s]”, or payments “made in connection with a securities contract,” that are “made by or to (or for the benefit of)” qualifying financial entities, including financial institutions, stockbrokers, commodities brokers and others. In a ruling that conflicts with precedent from the Second, Third, Sixth, Eighth, and Tenth Circuits, a decision last week by a Seventh Circuit panel held that the safe harbor provision of section 546(e) does not preclude a trustee from recovering a transfer to a party that was not a qualifying financial entity, where a qualifying financial institution was merely the conduit for the transaction. See FTI Consulting v. Merit Management Group, LP.

James Anderson
Jim Anderson is a litigator and trial lawyer. Jim’s practice focuses on commercial litigation, with a particular emphasis on disputes at the intersection of intellectual property and private capital. Drawing on his engineering background and his experience in the courtroom, he has successfully represented leading technology and pharmaceutical companies in high-stakes litigation. He also litigates cases on behalf of asset managers and private lenders that serve those industries.
Jim recently achieved a defense verdict before a Delaware jury in a case involving fraud and patent infringement allegations against a medical device company. He represents clients across a range of diverse industries in trial and appellate courts across the country, as well as before administrative and arbitral bodies including the International Trade Commission, Patent Trial and Appeal Board, and international arbitration tribunals under ICC and CPR Rules.
In addition to his trial practice, Jim offers strategic counsel to asset managers, portfolio companies, and private lenders, helping them to navigate regulatory and litigation risks. He also has experience advising clients on intellectual property strategy spanning the full range of patent, trademark, and trade secret protections. He has developed and maintained intellectual property portfolios in a broad range of industries, including consumer products, medical devices, machining and fabrication equipment, and semiconductor devices. Jim is registered to practice before the USPTO.
Jim also maintains an active pro bono practice. He has received awards for his work on behalf of victims of domestic violence and abuse.
Jim has a background in Mechanical Engineering, with a focus on energy, power, and fuel cell technologies. Prior to his career at Proskauer, Jim served as a judicial intern in the U.S. District Court for the District of Connecticut and represented clients with the UConn Intellectual Property and Entrepreneurship Law Clinic.
N.Y. Court of Appeals Adopts Business Judgment Rule, with Conditions, for Going-Private Mergers
The New York Court of Appeals has followed Delaware in holding that the business-judgment rule applies to going-private mergers as long as certain shareholder-protective measures are met. The court’s May 5, 2016 decision in In the Matter of Kenneth Cole Productions, Inc. Shareholder Litigation, Case No. 54, adopts the standard set forth by the Delaware Supreme Court in Kahn v. M & F Worldwide Corp., 88 A.3d 635 (Del. 2014) (“MFW”), and relaxes judicial scrutiny of controlling shareholders’ going-private mergers if the transactions provide certain protective conditions to safeguard the interests of minority shareholders.