Mr. Cahill’s article, "Commodity Supply Agreements Are Swap Agreements: A Counter-Intuitive But Quite Real Safe Harbor From Preference Avoidance,” has been published in International Corporate Rescue and analyzes a defense for commodity suppliers against the avoidance and recovery of transfers to such suppliers from debtors under the Bankruptcy Code.

Section 546(g) of the Bankruptcy Code exempts from preference or constructive fraudulent transfer the avoidance of any transfer made pursuant to a swap agreement with the Debtor. The Code's financial derivative safe harbor provisions and related definitions are broadly-worded. The Code's definition of "swap agreement" includes "commodity forward agreement." A "commodity forward agreement" is, for the Fourth Circuit Court of Appeals and other courts, a commodity supply agreement for future physical deliveries, which is used as a hedge.

Thus, creditors of United States bankruptcy debtors who supply or receive oil, natural gas, steel, polypropylene or any other commodity may do so pursuant to a contract that can be construed as a "swap agreement" that supports a total defense to avoidance of transfers received from the debtor. Implications with respect to other safe harbor provisions of the inclusion of "commodity forward agreement" within the definition of "swap agreement" will be the subject of a future paper.

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L&G Chosen to Conduct Employment Training for Circuit Court of Cook County

Rob Smeltzer, the partner in charge of the firm's employment law practice, will conduct the training of approximately 150 managers of the Circuit Court of Cook County, Illinois, one of the largest unified state court systems in the country. The training will commence in October of this year and center on the legal requirements of various state and federal employment laws, including but not limited to sexual harassment, religious and disability accommodation, the FMLA and overtime laws.

Lowis & Gellen Attorneys Negotiate Agreement To Sell Railroad For $90 Million

Lowis & Gellen's client, Permian Basin Railways, Inc., signed an agreement to sell 100% of its stock in Arizona Eastern Railway Company to Genesee & Wyoming, Inc. for $90.1 million in cash, subject to adjustment for final working capital. The Lowis & Gellen team of Gerald Haberkorn, Robert Leavitt and Mehreen Sherwani handled all legal aspects of the transaction including structuring, drafting, and negotiating the purchase documentation. The acquisition is subject to customary closing conditions and is expected to be completed by the end of the third quarter of 2011.

For more information about Lowis & Gellen's mergers and acquisition practice, please contact: Gerald Haberkorn, (312) 456-2701

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