The Supreme Court today denied cert in General Motors LLC v. Elliott (Docket No. 16-764). General Motors had petitioned the Court to review the Second Circuit’s decision related to its potential liability arising from Old GM’s faulty ignition switches. The bankruptcy court had held that the ignition switch claimants could not pursue claims against General Motors as the good faith purchaser of old GM’s assets. As Bill Rochelle wrote in his analysis last year, the Second Circuit reversed that decision, thus exposing New GM to liabilities on account of Old GM’s conduct.

The Court relisted another much-watched case, Deutsche Bank v. McCormick, for the next conference. That case, as described in Bill Rochelle’s Daily Wire, arises from the Tribune bankruptcy and presents the question of the scope of the § 546(e) safe harbor in fraudulent transfer actions. Courts of Appeals in the Second, Third, Sixth and Eighth Circuits have held that a fraudulent transfer is exempt when a financial institution acts as a mere conduit for fraudulently transferred property. In contrast, the Seventh and Eleventh Circuits have held that such transfers are exempt from avoidance only when the financial institution has its own beneficial interest in the transferred property.