Merit Management Group, LP v. FTI Consulting, Inc., 138 S. Ct. 883

Valley View agreed to buy all Bedford Downs stock for $55M; Credit Suisse wired funds to Citizens Bank escrow; Merit (a Bedford shareholder) received $16.5M.
Valley View’s parent later filed Chapter 11; FTI (litigation-trust trustee) sued to avoid the $16.5M Valley-View→Merit transfer as constructively fraudulent under 11 U.S.C. §548(a)(1)(B).
Merit invoked the §546(e) securities safe harbor, arguing the transfer was a “settlement payment … made by or to (or for the benefit of) … [a] financial institution” (Credit Suisse and Citizens Bank).
District Court granted judgment for Merit; Seventh Circuit reversed, holding §546(e) does not protect transfers where financial institutions were mere conduits.
Supreme Court granted certiorari to resolve whether courts should examine only the transfer the trustee seeks to avoid (Valley-View→Merit) or also its component intermediary transactions (e.g., Credit Suisse→Citizens→Merit).

Issue	Plaintiff's Argument (Merit)	Defendant's Argument (FTI)	Held
Whether §546(e) safe harbor applies by looking to all component transactions (including intermediary financial institutions)	Safe harbor protects the component transfers involving financial institutions; the parenthetical “(or for the benefit of)” shows Congress intended to cover intermediaries	The relevant transfer is the specific transfer the trustee seeks to avoid (Valley-View→Merit); component parts are irrelevant unless trustee alleges them as the avoidable transfer	The Court held the safe harbor applies only to the transfer the trustee seeks to avoid; because Valley View and Merit are not covered entities, §546(e) does not bar avoidance
Effect of 2006 addition of “(or for the benefit of)” to §546(e) — does it automatically protect intermediary conduits?	The addition abrogated precedent that excluded intermediaries; thus transfers “by or to” a financial institution (even as conduit) are protected	The phrase was added to align safe-harbor scope with avoidance provisions and does not change that the statute tests the transfer the trustee seeks to avoid	The Court held the amendment did not require treating every intermediary transmission as the relevant avoidable transfer; §546(e) still tests the trustee’s identified transfer for whether it was made by/to/for the benefit of a covered entity

United States v. Detroit Timber & Lumber Co., 200 U.S. 321 (context on syllabi not part of opinion)
Union Bank v. Wolas, 502 U.S. 151 (discussing purposes of avoiding powers)
BFP v. Resolution Trust Corp., 511 U.S. 531 (interpretation of constructive fraud provisions)
Robinson v. Shell Oil Co., 519 U.S. 337 (text-and-context approach to statutory interpretation)
Fidelity Financial Services, Inc. v. Fink, 522 U.S. 211 (§546 limits on avoiding powers)
Hall v. United States, 566 U.S. 506 (looking to statutory structure in Bankruptcy Code interpretation)
In re Munford, Inc., 98 F.3d 604 (11th Cir. 1996) (held safe harbor did not apply when financial institution acted only as intermediary)
Merit Mgmt. Group, L.P. v. FTI Consulting, Inc., 830 F.3d 690 (7th Cir. 2016) (appellate decision below reversing District Court)