Contemporary Industries Corporation v. Frost
United States Court of Appeals for the Eighth Circuit
564 F.3d 981 (2009)
Relevant factsFree
The Frosts (defendants) received $26,000,000 for their Contemporary Industries (debtor) stock in a leveraged buyout, with the payment routed through escrow agent First National Bank of Omaha; after Contemporary filed for bankruptcy, it and its unsecured creditors sought to avoid the payment, and the Frosts invoked the settlement-payment exception in § 546(e) of the bankruptcy code. The bankruptcy court granted the Frosts summary judgment, and the district court affirmed.
IssueFree
Whether, under § 546(e), a trustee may avoid transfers made by a financial institution in settling a securities transaction.