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Bradley’s Bankruptcy Basics: COVID-19 Bankruptcy Relief Extension Act Extends Various CARES Act Amendments to the Bankruptcy Code Thursday, April 29, 2021
Last March, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) made several changes to the Bankruptcy Code, including those changes discussed in more detail here. As it became clear that we would be dealing with COVID-19 for much longer than previously anticipated, Congress passed the Consolidated Appropriations Act (CAA), which made additional changes to the Bankruptcy Code, including those explored in more detail in this article.
Originally, several of the Bankruptcy Code amendments included in the prior legislation were scheduled to sunset in March 2021, on the first anniversary of the CARES Act. However, on March 27, 2021, hours before the originally scheduled sunsets, the COVID-19 Bankruptcy Relief Extension Act of 2021 (Extension Act) was pa
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Last March, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) made several changes to the Bankruptcy Code, including those changes discussed in more detail here. As it became clear that we would be dealing with COVID-19 for much longer than previously anticipated, Congress passed the Consolidated Appropriations Act (CAA), which made additional changes to the Bankruptcy Code, including those explored in more detail in this article.
Originally, several of the Bankruptcy Code amendments included in the prior legislation were scheduled to sunset in March 2021, on the first anniversary of the CARES Act. However, on March 27, 2021, hours before the originally scheduled sunsets, the COVID-19 Bankruptcy Relief Extension Act of 2021 (Extension Act) was passed. While the Extension Act extended certain of the Bankruptcy Code amendments included in the CARES Act, it did not exten
Statutory Background
Section 546(e) of the Bankruptcy Code, known as the “safe harbor” provision, shields specified types of payments from a bankruptcy trustee’s avoidance powers, including certain transfers “made by” a “financial participant” in connection with a “securities contract.” The scope of Section 546(e) has been the subject of extensive debate.
In re Samson Resources Corp. presented the specific question of whether a debtor can be considered a “financial participant” for the purposes of Section 546(e). In short, a “financial participant” is defined by Bankruptcy Code § 101(22A) as (A) an entity, (B) who has one or more required agreements, (C) in the required amounts, (D) with “the debtor or any other entity (other than an affiliate).”