D'Agnostino, Bingham Mc Cutchen LLP, Boston, MA, Joel W. Appellants seek to recover an amount sufficient to satisfy Tribune's debts to them by avoiding (recovering) payments by Tribune to shareholders that purchased all of its stock. In the present matter, the bankruptcy court granted appellants relief from the automatic stay on three occasions. And the bankruptcy court's third order, entered on March 15, 2012, set an expiration date of June 1, 2012, for the “stay imposed on the state law constructive fraudulent conveyance actions.” J. None of the Tribune shareholders filed objections to these orders. Thus, under both the bankruptcy court's orders and the confirmed reorganization plan, if appellants had actionable state law, constructive fraudulent conveyance claims, assertion of those claims was no longer subject to Section 362's automatic stay. App'x 15, 18 (2d Cir.2011) (holding that the automatic stay terminates at discharge); United States v. Under the implied preemption doctrine, state laws are “preempted to the extent of any conflict with a federal statute.
Kapusta, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, Sabin Willett & Michael C. Representatives of certain unsecured creditors of the Chapter 11 debtor Tribune Company appeal from Judge Sullivan's grant of a motion to dismiss their state law, constructive fraudulent conveyance claims brought against Tribune's former shareholders. Even if that meaning is one of multiple reasonable constructions of the statutory scheme, it would not necessarily preclude preemption because a preemptive effect may be inferred where it is not expressly provided.
Once a party enters bankruptcy, the Bankruptcy Code constitutes a wholesale preemption of state laws regarding creditors' rights.
Whether, as appellants argue, they were restored in full after two years, see 11 U.
Before WINTER, DRONEY, Circuit Judges, and HELLERSTEIN, District Judge.**Roy T. In consummating the LBO, Tribune borrowed over billion secured by its assets. Although fraudulent conveyance actions are against third parties rather than a debtor, there is caselaw, discussed infra, stating that the automatic stay applies to such actions. In re Bogdanovich, 292 F.3d 104, 110 (2d Cir.2002) (quoting 11 U.
Appellee Samuel Zell, a billionaire investor, proposed to acquire Tribune through an LBO. See In re Mc Mullen, 386 F.3d 320, 324 (1st Cir.2004) (noting that Section 362(a)(1), among other things, “safeguard[s] the debtor estate from piecemeal dissipation ․ ensur[ing] that the assets remain within the exclusive jurisdiction of the bankruptcy court pending their orderly and equitable distribution among the creditors”). The Bankruptcy Code empowers a bankruptcy court to release parties from the automatic stay “for cause” shown.
It is undisputed that Tribune transferred the over billion to a “securities clearing agency” or other “financial institution,” as those terms are used in Section 546(e), acting as intermediaries in the LBO transaction. a “securities clearing agency” or “financial institution,” that is a “settlement payment” in a securities transaction or is a transfer “in connection with a securities contract.” The district court held that Section 546(e) did not bar appellants' actions because: (i) Section 546(e)'s prohibition on avoiding the designated transfers applied only to a bankruptcy trustee et al., id. The district court ruled that Section 362's automatic stay provision deprived appellants of statutory standing to bring their claims because the Litigation Trustee was still pursuing an intentional fraudulent conveyance action challenging the same transfers under Section 548(a)(1)(A).
Those intermediaries in turn paid the funds to the shareholders in exchange for their shares that were then returned to Tribune. In April 2011, the bankruptcy court lifted the Code's automatic stay with regard to appellants' actions. at 315–16; and (ii) Congress had declined to extend Section 546(e) to state law, fraudulent conveyance claims brought by creditors, id. DISCUSSIONWe review de novo the district court's grant of appellees' motion to dismiss.
The confirmed plan also provided that the Retiree and Noteholder Appellants could pursue “any and all LBO–Related Causes of Action arising under state fraudulent conveyance law,” except for the federal intentional fraudulent conveyance and other LBO-related claims pursued by the Litigation Trust. The plan was scheduled to take effect on December 31, 2012, the date on which Tribune emerged from bankruptcy.c) District Court Proceedings Appellants' various state law, fraudulent conveyance complaints alleged that the LBO payments, made through financial intermediaries as noted above, were for more than the reasonable value of the shares and made when Tribune was in distressed financial condition.
Fornshell, Ice Miller LLP, Columbus, OH, for Defendants–Appellees–Cross–Appellants Pension Funds. Entwistle, Entwistle & Cappucci, LLP, New York, NY, David N. Schoenfeld, Robinson & Cole LLP, New York, NY, for Defendants–Appellees–Cross–Appellants Mutual Funds. That Section shields from avoidance proceedings brought by a bankruptcy trustee transfers by or to financial intermediaries effectuating settlement payments in securities transactions or made in connection with a securities contract, except through an intentional fraudulent conveyance claim. BACKGROUNDa) The LBOTribune Media Company (formerly known as “Tribune Company”) is a multimedia corporation that, in 2007, faced deteriorating financial prospects. The relevant facts being undisputed for purposes of this proceeding, only issues of law are before us.a) Statutory Standing to Bring the Claims We first address the district court's dismissal of appellants' claims on the ground that they lacked standing to bring them because of Section 362(a)(1). Telewide Sys., Inc., 790 F.2d 206, 207 (2d Cir.1986) (per curiam), by avoiding wasteful, duplicative, individual actions by creditors seeking individual recoveries from the debtor's estate, and by ensuring an equitable distribution of the debtor's estate. Once a creditor obtains “a grant of relief from the automatic stay” under Section 362(d), it may “press its claims outside of the bankruptcy proceeding.” St.
Ross Martin, Ropes & Gray LLP, New York, NY, Matthew L. Neubauer, Steptoe & Johnson LLP, Los Angeles, CA, for Defendants–Appellees–Cross–Appellants Individual Beneficial Owners. Doluisio & Alexander Bilus, Dechert LLP, Philadelphia, PA, Steven R. Le Blanc, Milbank, Tweed, Hadley & Mc Cloy LLP, New York, NY, for Defendant–Appellee–Cross–Appellant At–Large. Kevin Carroll, Securities Industry and Financial Markets Association, Washington, DC, Holly K. On issue (ii), the subject of appellees' cross-appeal, we hold that appellants' claims are preempted by Section 546(e). The purpose of the stay is “to protect creditors as well as the debtor,” Ostano Commerzanstalt v.
As in the present matter, the presumption against preemption usually goes to the weight to be given to the lack of an express statement overriding state law. at 1950 (stating that because “[t]he regulation of domestic relations is traditionally the domain of state law ․ [t]here is [ ] a presumption against pre-emption”) (internal quotation marks and citation omitted). To understate the proposition, the regulation of creditors' rights has “a history of significant federal presence.” United States v.
Town of Clarkstown, 612 F.3d 97, 104 (2d Cir.2010) (“The key to the preemption inquiry is the intent of Congress.”).
Therefore, the complaints concluded, the payments were avoidable by creditors under the laws of various states.