Issue link: https://mbozikis.ufcontent.com/i/1422521
133 Conveyance Litigation, 946 F.3d 66, 78 n.9 (2d Cir. 2019); 11 U.S.C. §101(22)(A). Transfers made within two years prior to the bankruptcy filing and with actual intent to hinder, delay or defraud creditors are not protected. In addition to the foregoing provisions, Sections 553 and 562 also touch upon safe harbor issues. As noted above in Chapter V.D.3., Section 553 generally preserves setoff rights in bankruptcy, provided the offsetting debt and claim are both prepetition and are mutual, but permits the court to avoid setoffs where, among other things, (i) the claim was acquired within ninety days of the bankruptcy filing while the debtor was insolvent, (ii) the debt was acquired within ninety days of the filing, while the debtor was insolvent and for the purpose of obtaining a right of setoff, or (iii) the creditor's exercise of setoff within ninety days before filing "improved its position" (i.e., reduced its net unsecured claim) during such ninety day period. Each of these three "setoff avoidance" provisions contains an exception for the setoffs described in the Safe Harbor Provisions. Historically, a number of decisions under the Bankruptcy Code, the former Bankruptcy Act and other insolvency or receivership laws have recognized an exception to the mutuality requirement for setoff where the parties' contract expressly permits multi-party setoff. In 2009, the Delaware Bankruptcy Court (in a decision not addressing the impact of the Safe Harbor Provisions) rejected a creditor's invocation of a contractual netting provision to offset amounts the creditor owed one debtor against amounts owed to the creditor by the other debtor entities. See In re SemCrude, L.P., 399 B.R. 388 (Bankr. D. Del. 2009), aff'd 428 B.R. 590 (D. Del. Apr 30, 2010). Subsequently, the court in In re Lehman Bros., Inc., 458 B.R. 134 (Bankr. S.D.N.Y. 2011) denied enforcement of multi-party setoff rights in a Safe Harbor Contract, relying on the SemCrude decision and further concluding that the Safe Harbor Provisions set forth in Sections 560 and 561(a) of the Bankruptcy Code apply only to the extent that the requirements (including mutuality) contained in Section 553(a) are met. Id. at 138–43; accord Sass v. Barclays Bank plc (In re Am. Home