In Re: Enron Creditors Recovery Corp. v. Alfa, S.A.B. de C.V., et al.

Enron Creditors Recovery Corp. (Enron) sought to avoid and recover payments it made to redeem its commercial paper prior to maturity from appellees, whose notes were redeemed by Enron. On appeal, Enron challenged the district court's conclusion that 11 U.S.C. 546(e)'s safe harbor, which shielded "settlement payments" from avoidance actions in bankruptcy, protected Enron's redemption payments whether or not they were made to retire debt or were unusual. The court affirmed the district court's decision and order, holding that Enron's proposed exclusions from the reach of section 546(e) have no basis in the Bankruptcy Code where the payments at issue were made to redeem commercial paper, which the Bankruptcy Code defined as security. Therefore, the payments at issue constituted the "transfer of cash ... made to complete [a] securities transaction" and were settlement payments within the meaning of 11 U.S.C. 741(8). The court declined to address Enron's arguments regarding legislative history because the court reached its conclusion based on the statute's plain language.