Wyle

The principal question in this ease is whether section 546(e) of the Bankruptcy Code bars a trustee from recovering as a fraudulent conveyance transfers made by a stockbroker pursuant to a reverse repurchase agreement used to facilitate a leveraged buy out. I conclude that there are no genuine issues of material fact and that section 546(e) bars trustee’s action, and therefore grant summary judgment for defendant.

FACTS

The material facts are not in dispute. On December 30, 1987, MaxPharma, Inc. paid Connecticut General Corporation (CIGNA) $500,0Q0 for an option entitling it to purchase stock of Debtor Hamilton Taft & Company (Debtor) from CIGNA for $4,100,000. Max-Pharma could exercise the option only through January 29, 1988. The $500,000 option price was applicable to the purchase price, but was otherwise non-refundable. MaxPharma was unable to find a lender willing to arrange financing through a “stock loan,” whereby Debtor’s stock would be used as collateral to secure the loan. Defendant Howard, Weil, Labouisse, Friedrichs Incorporated (Defendant) informed MaxPharma that it did not make “stock loans,” but could lend money with a treasury bill as security by…