October Term 2017 · Docket 16-784
Does the bankruptcy safe harbor protect transfers to financial institutions even if the funds reach non-protected parties?
The dispute centers on whether a bankruptcy trustee can recover funds sent to a financial institution under a safe harbor provision.
Verified source milestones
- — An official oral-argument transcript was verified.
- — An official oral-argument transcript was verified.
The arguments, in order
This case may have been argued more than once. Each entry below uses that session's official transcript. Later arguments do not erase earlier ones.
Argument 1 ·
What happened at the argument
Mr. Walsh argued that Congress included intermediaries in the safe harbor from the start.
Mr. Walsh stated that the relevant transfers involve financial institutions like Credit Suisse.
Mr. Clement addressed the definition of a financial institution first.
Mr. Clement then addressed the specific main legal question by the Court.
Read the official transcript for this argument · Official argument details
Sources used for this argument breakdown
- Official Supreme Court Transcript — file page 10, lines 7-9 — Transcript, file page 10, lines 7-9
- Official Supreme Court Transcript — file page 33, lines 41-25 — Transcript, file page 33, lines 41-25
- Official Supreme Court Transcript — file page 4, lines 11-21 — Transcript, file page 4, lines 11-21
- Official Supreme Court Transcript — file page 4, lines 23-51 — Transcript, file page 4, lines 23-51
- Official Supreme Court Transcript — file page 4, lines 53-17 — Transcript, file page 4, lines 53-17
- Official Supreme Court Transcript — file page 6, lines 31-37 — Transcript, file page 6, lines 31-37
- Official Supreme Court Transcript — file page 6, lines 43-49 — Transcript, file page 6, lines 43-49
- Official Supreme Court Transcript — file page 6, lines 9-17 — Transcript, file page 6, lines 9-17
- Official Supreme Court Transcript — file page 67, lines 55-21 — Transcript, file page 67, lines 55-21
- Official Supreme Court Transcript — file page 69, lines 23-25 — Transcript, file page 69, lines 23-25
- Official Supreme Court Transcript — file page 69, lines 47-49 — Transcript, file page 69, lines 47-49
- Official Supreme Court Transcript — file page 7, lines 35-39 — Transcript, file page 7, lines 35-39
- Official Supreme Court Transcript — file page 7, lines 9-11 — Transcript, file page 7, lines 9-11
- Official Supreme Court Transcript — file page 8, lines 37-49 — Transcript, file page 8, lines 37-49
- Official Supreme Court Transcript — file page 8, lines 53-9 — Transcript, file page 8, lines 53-9
- Official Supreme Court Transcript — file page 8, lines 9-17 — Transcript, file page 8, lines 9-17
- Official Supreme Court Transcript — file page 9, lines 13-15 — Transcript, file page 9, lines 13-15
- Official Supreme Court Transcript — file page 9, lines 37-43 — Transcript, file page 9, lines 37-43
A citizen's guide to the whole case
What this case is about
This case tests the scope of a federal bankruptcy safe harbor. The provision shields certain financial transactions from being unwound by a bankruptcy trustee. The core legal question is whether this protection applies when the funds ultimately reach parties who do not qualify for the shield.
Official sources for this section
- Official Supreme Court Transcript — file page 33, lines 41-25 — Transcript, file page 33, lines 41-25
- Official Supreme Court Transcript — file page 4, lines 23-51 — Transcript, file page 4, lines 23-51
- Official Supreme Court Transcript — file page 67, lines 55-21 — Transcript, file page 67, lines 55-21
How the case got here
The Supreme Court heard oral argument in this case on November 6, 2017.
Official sources for this section
- Official Supreme Court Transcript — file page 4, lines 11-21 — Transcript, file page 4, lines 11-21
- Official Supreme Court Transcript — file page 69, lines 47-49 — Transcript, file page 69, lines 47-49
What each side wants
The trustee wants to recover the funds for creditors.
The financial institution wants to keep the funds protected by the safe harbor.
Official sources for this section
- Official Supreme Court Transcript — file page 33, lines 41-25 — Transcript, file page 33, lines 41-25
- Official Supreme Court Transcript — file page 4, lines 23-51 — Transcript, file page 4, lines 23-51
- Official Supreme Court Transcript — file page 67, lines 55-21 — Transcript, file page 67, lines 55-21
What each side says
The trustee argues the safe harbor does not protect funds reaching non-protected parties.
The financial institution argues the safe harbor protects transfers to financial institutions regardless of the final recipient.
Official sources for this section
- Official Supreme Court Transcript — file page 33, lines 41-25 — Transcript, file page 33, lines 41-25
- Official Supreme Court Transcript — file page 4, lines 23-51 — Transcript, file page 4, lines 23-51
- Official Supreme Court Transcript — file page 67, lines 55-21 — Transcript, file page 67, lines 55-21
What the justices asked
Justice Sotomayor asked if the obligation issue is prospective.
Justice Ginsburg asked how either bank is at risk in this scenario.
Official sources for this section
- Official Supreme Court Transcript — file page 10, lines 7-9 — Transcript, file page 10, lines 7-9
- Official Supreme Court Transcript — file page 4, lines 53-17 — Transcript, file page 4, lines 53-17
- Official Supreme Court Transcript — file page 6, lines 31-37 — Transcript, file page 6, lines 31-37
- Official Supreme Court Transcript — file page 6, lines 43-49 — Transcript, file page 6, lines 43-49
- Official Supreme Court Transcript — file page 6, lines 9-17 — Transcript, file page 6, lines 9-17
- Official Supreme Court Transcript — file page 69, lines 23-25 — Transcript, file page 69, lines 23-25
- Official Supreme Court Transcript — file page 69, lines 47-49 — Transcript, file page 69, lines 47-49
- Official Supreme Court Transcript — file page 7, lines 35-39 — Transcript, file page 7, lines 35-39
- Official Supreme Court Transcript — file page 7, lines 9-11 — Transcript, file page 7, lines 9-11
- Official Supreme Court Transcript — file page 8, lines 37-49 — Transcript, file page 8, lines 37-49
- Official Supreme Court Transcript — file page 8, lines 53-9 — Transcript, file page 8, lines 53-9
- Official Supreme Court Transcript — file page 8, lines 9-17 — Transcript, file page 8, lines 9-17
- Official Supreme Court Transcript — file page 9, lines 13-15 — Transcript, file page 9, lines 13-15
- Official Supreme Court Transcript — file page 9, lines 37-43 — Transcript, file page 9, lines 37-43
Why it matters
This case defines the boundary of financial transaction protections in bankruptcy. It determines whether creditors can recover funds that passed through protected institutions. The outcome affects the stability of financial markets and the rights of bankruptcy estates.
Official sources for this section
- Official Supreme Court Transcript — file page 33, lines 41-25 — Transcript, file page 33, lines 41-25
- Official Supreme Court Transcript — file page 4, lines 23-51 — Transcript, file page 4, lines 23-51
- Official Supreme Court Transcript — file page 67, lines 55-21 — Transcript, file page 67, lines 55-21
What happens next
This article currently covers the argument record. Use the official docket link for later case activity.
Official sources for this section
- Official Supreme Court Transcript — file page 10, lines 7-9 — Transcript, file page 10, lines 7-9
- Official Supreme Court Transcript — file page 4, lines 11-21 — Transcript, file page 4, lines 11-21
- Official Supreme Court Transcript — file page 4, lines 53-17 — Transcript, file page 4, lines 53-17
- Official Supreme Court Transcript — file page 6, lines 31-37 — Transcript, file page 6, lines 31-37
- Official Supreme Court Transcript — file page 6, lines 43-49 — Transcript, file page 6, lines 43-49
- Official Supreme Court Transcript — file page 6, lines 9-17 — Transcript, file page 6, lines 9-17
- Official Supreme Court Transcript — file page 69, lines 23-25 — Transcript, file page 69, lines 23-25
- Official Supreme Court Transcript — file page 69, lines 47-49 — Transcript, file page 69, lines 47-49
- Official Supreme Court Transcript — file page 7, lines 35-39 — Transcript, file page 7, lines 35-39
- Official Supreme Court Transcript — file page 7, lines 9-11 — Transcript, file page 7, lines 9-11
- Official Supreme Court Transcript — file page 8, lines 37-49 — Transcript, file page 8, lines 37-49
- Official Supreme Court Transcript — file page 8, lines 53-9 — Transcript, file page 8, lines 53-9
- Official Supreme Court Transcript — file page 8, lines 9-17 — Transcript, file page 8, lines 9-17
- Official Supreme Court Transcript — file page 9, lines 13-15 — Transcript, file page 9, lines 13-15
- Official Supreme Court Transcript — file page 9, lines 37-43 — Transcript, file page 9, lines 37-43
Official Court provenance
Official docket and case history · Official Supreme Court oral-argument detail page
Title and summary sources
- Official Supreme Court Transcript — file page 33, lines 41-25 — Transcript, file page 33, lines 41-25
- Official Supreme Court Transcript — file page 4, lines 23-51 — Transcript, file page 4, lines 23-51
- Official Supreme Court Transcript — file page 67, lines 55-21 — Transcript, file page 67, lines 55-21
- Official Supreme Court Transcript — file page 33, lines 41-25 — Transcript, file page 33, lines 41-25
- Official Supreme Court Transcript — file page 4, lines 23-51 — Transcript, file page 4, lines 23-51
- Official Supreme Court Transcript — file page 67, lines 55-21 — Transcript, file page 67, lines 55-21
Revision history
- Revision 1 · Official Transcript ·
Correction: Rewritten to the concise citizen-facing editorial standard.
- Revision 2 · Official Transcript ·
Correction: Migrated to the dated official Court activity contract without model use.