test folder

132 termination, acceleration or liquidation of a repurchase agreement; (iv) Section 560 permits the exercise of ipso facto rights of a swap participant or financial participant to cause the termination, acceleration or liquidation of a swap agreement, as well as setoff or netting of termination values or payment amounts arising therefrom; and (v) Section 561 permits ipso facto termination, acceleration and liquidation of, and offset or netting under or in connection with, one or more Safe Harbor Contracts (i.e., "cross product netting" under a master netting agreement). The exceptions to the automatic stay are found in Sections 362(b) and (o) of the Bankruptcy Code. Sections 362(b)(6), (7), (17) and (27) provide relief from the automatic stay to exercise contractual rights to offset or net under Safe Harbor Contracts, or to exercise contractual rights under a security agreement or credit enhancement in connection with a Safe Harbor Contract. Moreover, under Section 362(o), a court may not enjoin the exercise of rights under Safe Harbor Contracts that are exempted from the automatic stay under Section 362(b). Lastly, Section 546 of the Bankruptcy Code protects safe harbor counterparties from avoidance of certain prepetition transfers under or in connection with a Safe Harbor Contract. These provisions immunize the protected party from preference or "constructive" fraudulent conveyance claims. In Merit Management Group, LP v. FTI Consulting, Inc., 138 S.Ct. 883 (2018), the Supreme Court concluded that the presence of a "financial institution" in a transaction did not extend the safe harbor protection from avoidance to a recipient of a transfer that was not itself argued to be a protected party. However, the defendant in that case failed to raise the argument that it was itself a protected "financial institution" because it was a customer of a financial institution. See In re Tribune Co. Fraudulent

• Cover