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0 pointsgabrielgrant3y ago0 comments

I don't believe the bankruptcy clawback provisions you're referring to apply here, because this is an FDIC conservatorship/receivership, not a bankruptcy proceeding. I don't fully understand why this particular part of the processes differs, but I'd argue it's that it does unfortunate, as it incentivizes bank runs like this.

There is an extensive comparison of the two processes in [1]. Specifically:

> the Bankruptcy Code provides trustees the authority to avoid, that is, claw-back or reverse, certain transfers (subject to certain limitations52) made by debtors

> the FDIC as conservator or receiver may not avoid (i.e., reverse or claw-back) any property transfer pursuant to a qualified financial contract unless the transfer was performed with the "actual intent to hinder, delay, or defraud."

[1]: https://www.everycrsreport.com/reports/R40530.html

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glasshug3y ago

I do love a CRS report, but that was written before Dodd–Frank imported the bankruptcy code rules for preferential transfers into FDIC receivership.

> The Corporation as receiver for any covered financial company may avoid a transfer of an interest of the covered financial company in property [...] that enables the creditor to receive more than the creditor would receive if [...] the covered financial company had been liquidated under chapter 7 of the Bankruptcy Code... (12 U.S.C. 5390(a)(11)(b))

It also calls the 90-day clawback period out explicitly.

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glasshug3y ago

I do love a CRS report, but that was written before Dodd–Frank imported the bankruptcy code rules for preferential transfers into FDIC receivership.

It also calls the 90-day clawback period out explicitly.

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