Bankruptcy Court Holds That Safe Harbor in Section 546(e) of the Bankruptcy Code for "Settlement Payments" Protects Recipients of Repurchase Payments for Privately Placed Notes

On July 27, 2011, the U.S. Bankruptcy Court for the Southern District of New York held in the bankruptcy proceeding of Quebecor World (USA) Inc. that the safe harbor for certain “settlement payments…in connection with … securities contract[s]” in Section 546(e) of the Bankruptcy Code protects recipients of prepetition repurchase payments on privately placed notes from an action for the avoidance and recovery of such payments.