Deutsche Bank Trust Company Americas v. Robert R. McCormick Foundation

Issues: (1) Whether the U.S. Court of Appeals for the 2nd Circuit correctly held, in conflict with the decisions of four other U.S. courts of appeal and of the Supreme Court, that the presumption against preemption of state law does not apply to creditor-rights claims once federal bankruptcy law has been invoked; (2) whether the 2nd Circuit correctly held that laws allowing creditors to avoid certain fraudulent transfers, which long have existed in every state, are preempted because they are an obstacle to the “purposes and objectives” of 11 U.S.C. § 546(e), notwithstanding the Supreme Court’s unanimous holding in Merit Management Group, LP v. FTI Consulting Inc. that Section 546(e) does not have the purpose that the 2nd Circuit ascribed to it; and (3) whether, notwithstanding the holding in Merit that Section 546(e) does not exempt fraudulent transfers from avoidance merely because a financial institution acted as a conduit, the 2nd Circuit correctly held that Section 546(e) does exempt certain fraudulent transfers from avoidance if executed via a bank as a conduit, on the ground, left open in Merit, that the bank’s customer is itself a “financial institution.” CVSG: 3/12/2021.