20

- 3257

- cv (L) In re: Nine West LBO Sec

. Litig

. U NITED S TATES C OURT OF A PPEALS FOR THE S ECOND C IRCUIT
August Term 2021 (Argued: March 10, 2022 Decided: November 27 , 202 3)
Docket No s . 20

- 3257

- cv (L) , 20

- 3290

- cv, 20

- 3315

- cv, 20

- 3326

- cv, 20- 3327

- cv, 20

- 3334

- cv, 20

- 3335

- cv, 20

- 3941

- cv, 20

- 3952

- cv, 20

- 3959

- cv, 20

- 3961

- cv, 20

- 3964

- cv, 20

- 3969

- cv, 20

- 3980

- cv, 20

- 3981

- cv, 20

- 3992

- cv, 20

- 3998

- cv

I N RE : N INE W EST LBO S ECURITIES L ITIGATION

M ARC S. K IRSCHNER , AS T RUSTEE FOR THE NWHI L ITIGATION T RUST , W ILMINGTON S AVINGS F UND S OCIETY , FSB, AS SUCCESSOR I NDENTURE T RUSTEE FOR THE 6.875%

S ENIOR N OTES DUE 2019, THE 8.25% S ENIOR N OTES DUE 2019, AND THE 6.125% S ENIOR N OTES DUE 2034 OF N INE W EST H OLDINGS , I NC ., Plaintiffs

- Appellants , ABC, Plaintiff ,

v.
R OBECO C APITAL G ROWTH F UNDS
- R OBECO BP U.S. P REMIUM E QUITIES , FKA B OSTON P ARTNERS U.S. P REMIUM E QUITY F UND , DFA I NVESTMENT D IMENSIONS G ROUP I NC
. U.S. C ORE E QUITY 1 P ORTFOLIO , DFA I NVESTMENT D IMENSIONS G ROUP

I NC
. U.S. C ORE E QUITY 2 P ORTFOLIO , DFA I NVESTMENT D IMENSIONS G ROUP I NC
.

U.S. M ICRO C AP P ORTFOLIO , DFA I NVESTMENT D IMENSIONS G ROUP I NC
. U.S. S MALL C AP P ORTFOLIO , DFA I NVESTMENT D IMENSIONS G ROUP I NC
. U.S. S MALL

C AP V ALUE P ORTFOLIO , D IMENSIONAL F UNDS PLC G LOBAL T ARGETED V ALUE F UND , DFA I NVESTMENT D IMENSIONS G ROUP I NC
. U.S. T ARGETED V ALUE2 P ORTFOLIO , AKA N ATIONWIDE U

. S

. T ARGETED V ALUE S TRATEGY , D IMENSIONAL F UNDS PLC U.S. S MALL C OMPANIES F UND , AKA I RISH U.S. S MALL C AP F UND , DFA

A USTRALIA L IMITED G LOBAL C ORE E QUITY T RUST , AKA D EFENDANT TX

- 1, DFA I NVESTMENT D IMENSIONS G ROUP I NC
. TA U

. S

. C ORE E QUITY 2 P ORTFOLIO , AKA D EFENDANT TX

- 2, DFA I NVESTMENT D IMENSIONS G ROUP I NC
. T AX
- M ANAGED U

. S

.

S MALL C AP P ORTFOLIO , AKA D EFENDANT TX

- 3, DFA I NVESTMENT D IMENSIONS G ROUP I NC
. T AX
- M ANAGED U

. S

. T ARGETED V ALUE P ORTFOLIO , AKA D EFENDANT TX

- 4, DFA I NVESTMENT D IMENSIONS G ROUP I NC
. U

. S

. S OCIAL C ORE E QUITY 2 P ORTFOLIO , AKA D EFENDANT TX

- 5, DFA I NVESTMENT D IMENSIONS G ROUP I NC
. U

. S

. V ECTOR E QUITY P ORTFOLIO , AKA D EFENDANT TX

- 6, DFA I NVESTMENT T RUST C OMPANY T AX
- M ANAGED U

. S

. M ARKETWIDE V ALUE S ERIES , AKA D EFENDANT TX

7, DFA U

. S

. C ORE E QUITY F UND , AKA D EFENDANT TX

- 8, DFA U

. S

. V ECTOR E QUITY F UND , AKA D EFENDANT TX

- 9, A MERICAN B EACON S MALL C AP V ALUE F UND , AKA D EFENDANT TX

- 10, HBK M ASTER F UND L.P., AKA D EFENDANT TX

- 11, HBK Q UANTITATIVE S TRATEGIES M ASTER F UND L.P., AKA D EFENDANT TX

- 12, K ENNY

A LLAN T ROUTT S EPARATE T RUST E STATE , AKA D EFENDANT TX

- 13, M ICRO C AP S UBTRUST , AKA D EFENDANT TX

- 14, S MALL C AP V ALUE S UBTRUST , AKA D EFENDANT TX

- 15, T AX
- M ANAGED U

. S

. E QUITY S ERIES , AKA D EFENDANT TX

- 16, U.S. S MALL C AP S UBTRUST , AKA D EFENDANT TX

- 17, USAA E XTENDED M ARKET I NDEX F UND , V ARIABLE A NNUITY L IFE I NSURANCE C OMPANY I

- S MALL C AP I NDEX F UND , V ARIABLE A NNUITY L IFE I NSURANCE C OMPANY I

- S MALL C AP S PECIAL V ALUES F UND , M ARY M ARGARET H ASTINGS G EORGIADES , F LEXSHARES M ORNINGSTAR U NITED S TATES M ARKET F ACTOR T ILT I NDEX F UND , D EFENDANT IL

1, T ELENDOS , LLC, HFR A SSET M ANAGEMENT , L.L.C., N ORTHERN S MALL C AP C ORE

F UND , N ORTHERN S MALL C AP I NDEX F UND , N ORTHERN S MALL C AP V ALUE F UND , N UVEEN S MALL C AP I NDEX F UND , P EAK 6 I NVESTMENTS LLC, FKA PEAK6 I NVESTMENTS , L.P., S TATE F ARM S MALL C AP I NDEX F UND , S TATE F ARM V ARIABLE

P RODUCTS T RUST , S MALL C AP E QUITY I NDEX F UND , V OYA R USSELL S MALL C AP I NDEX P ORTFOLIO , CNH M ASTER A CCOUNT , L.P., AQR A BSOLUTE R ETURN M ASTER A CCOUNT , L.P., AQR D ELTA M ASTER A CCOUNT , L.P., AQR D ELTA S APPHIRE F UND , L.P., AQR DELTA XN M ASTER A CCOUNT , L.P., AQR F UNDS
- AQR M ULTI
S TRATEGY A LTERNATIVE F UND , CNH O PPORTUNISTIC P REMIUM O FFSHORE F UND , L.P., AQR F UNDS
- AQR D IVERSIFI ED A RBITRAGE F UND , S CHWAB C APITAL T RUST ,3 S CHWAB F UNDAMENTAL U

. S

. S MALL C OMPANY I NDEX F UND , S CHWAB S MALL
- C AP I NDEX F UND , S CHWAB T OTAL S TOCK M ARKET I NDEX F UND , W ELLS F ARGO D ISCIPLINED S MALL C AP F UND , FKA W ELLS F ARGO S MALL C AP O PPORTUNITIES F UND , D EFENDANT IL

- 2 , Defendant s - Appellee s , J OHN T M C C LAIN , G ERALD C. C ROTTY , T AMI F ERSKO , A DVANCED S ERIES T RUST A CADEMIC S TRATEGIES A LLOCATION P ORTFOLIO , A DVANCED S ERIES T RUST S MALL C AP V ALUE P ORTFOLIO , J EFF B RISMAN , M ARK D E Z AO , C YNTHIA D I P IETRANTONIO , J OHN D ' S OUZA , N INIVE G IORDANO , J ACK G ROSS , A LISON H EMMING , P ATRICIA K ENNY , I RENE A. K OUMENDOUROS , A RUNDHATI K ULKARNI , D EFENDANT NJ

- 1,

D EFENDANT NJ

- 2, S UZANNE M ALONEY , I RA M ARGULIES , S USAN M. M C C OY , V INCENT M ORALES , N INE C HAPTERS C APITAL M ANAGEMENT LLC, P AMELA M. P AUL , C HARLES J OSEPH P ICKETT , PGIM QMA S MALL
- C AP V ALUE F UND , D EFENDANT NJ

- 3, P RUDENTIAL F INANCIAL , I NC ., T HE P RUDENTIAL I NSURANCE C OMPANY OF A MERICA , P RUDENTIAL R ETIREMENT I NSURANCE AND A NNUITY C O ., Q UANTITATIVE M ANAGEMENT A SSOCIATES LLC, A RLENE S TARR , D EFENDANT NJ

- 4, A RTHUR E. L EE , N ANCY L. L EE , P RIAC F UNDS , C HRISTOPHER R. C ADE , I RA M. D ANSKY , I RA M ARTIN D ANSKY R EVOCABLE T RUST , M AHMOOD H ASSANI
- S ADI , T HOMAS N OLAN , P ENTWATER C APITAL M ANAGEMENT LP, R ICHARD H. H EIN ,

T RUSTEE , R ICHARD H. H EIN R EV
. T RUST U/A 06/12/95, C YNTHIA F OY R UPP , T RANSAMERICA A SSET M ANAGEMENT , I NC ., W OLVERINE A SSET M ANAGEMENT LLC, W ESLEY R C ARD , A NN M ARIE C W ILKINS , A RBOR P LACE L TD
. P ARTNERSHIP , B OSTON P ARTNERS A LL
- C AP V ALUE F UND , B OSTON P ARTNERS A SSET M ANAGEMENT , LLC, B OSTON P ARTNERS G LOBAL I NVESTORS I NC ., B OSTON P ARTNERS , LLC, B RIGHTHOUSE F UNDS T RUST II, FKA B RIGHTHOUSE F UNDS T RUST

M ET
- S ERIES , C OLUMBIA M ANAGEMENT I NVESTMENT A DVISERS LLC, C OLUMBIA M ULTI
- M ANAGER A LTERNATIVE S TRATEGIES F UND , DWS I NVESTMENT M ANAGEMENT A MERICAS , I NC ., FKA D EUTSCHE A SSET M ANAGEMENT (S CUDDER ), DWS S MALL C AP I NDEX VIP, G EODE D IVERSIFIED F UND , A SEGREGATED ACCOUNT OF G EODE C APITAL M ASTER F UND L TD
. FORMERLY KNOWN AS GDF1, A SEGREGATED ACCOUNT OF G EODE C APITAL M ASTER F UND L TD ., JHF II S TRATEGIC E QUITY A LLOCATION F UND , JHVIT S MALL C AP I NDEX T RUST , FKA JHT S MALL C AP I NDEX T RUST , JHVIT S MALL C AP O PPORTUNITIES T RUST , FKA JHT S MALL C AP I NDEX T RUST , JHVIT S TRATEGIC E QUITY A LLOCATION T RUST , AKA J OHN H ANCOCK V ARIABLE I NSURANCE T RUST S EA S MALL C AP , J OHN H ANCOCK II S TRATEGIC E QUITY4 A LLOCATION S MALL C AP F UND , AKA J OHN H ANCOCK II S EA S MALL C AP , J OHN H ANCOCK U.S. T ARGETED V ALUE F UND , J OHN H ANCOCK U.S. T ARGETED V ALUE T RUST , L INCOLN I NSTITUTE OF L AND P OLICY , L ONGFELLOW I NVESTMENT M ANAGEMENT C O ., LLC, M ANULIFE F INANCIAL , M ANULIFE I NVESTMENT M ANAGEMENT (N ORTH A MERICA ) L TD
. , FKA M ANULIFE A SSET M ANAGEMENT

N ORTH A MERICA L TD
. , P ANAGORA A SSET M ANAGEMENT I NC ., R HUMBLINE A DVISERS LP, S TATE S TREET B ANK M AYA A CCOUNT H OLDER , S TATE S TREET G LOBAL A DVISORS , S TATE S TREET G LOBAL A DVISORS R USSELL 1000 V ALUE F UND CTF, S TATE S TREET G LOBAL A DVISORS R USSELL 2000 I NDEX F UND , S TATE S TREET G LOBAL A DVISORS R USSELL 2000 V ALUE F UND CTF, S TATE S TREET G LOBAL A DVISORS R USSELL 3000 I NDEX F UND CTF, S TATE S TREET G LOBAL A DVISORS R USSELL 3000 I NDEX F UND , S TATE S TREET G LOBAL A DVISORS R USSELL 3000 I NDEX F UND SL SER A, S TATE S TREET G LOBAL A DVISORS R USSELL S MA LL C AP F UND C OMPLETE S/L A, S TATE S TREET G LOBAL A DVISORS R USSELL S PECIAL S MALL C OMPANY F UND , S TATE

S TREET G LOBAL A DVISORS R USSELL S PECIAL S MALL C OMPANY F UND CTF, S TATE

S TREET G LOBAL A DVISORS T OTAL ETF, S TATE S TREET G LOBAL A DVISORS U.S. E XTENDED M ARKET I NDEX F UND , AKA U.S. E XTENDED M ARKET F UND SL, S TATE S TREET B ANK AND T RUST C OMPANY , D IANNE C ARD , FIAM LLC, AKA F IDELITY I NSTITUTIONAL A SSET M ANAGEMENT , FKA P YRAMIS G LOBAL A DVISORS , F IDELITY A SSET A LLOCATION C URRENCY N EUTRAL P RIVATE P OOL , F IDELITY A SSET A LLOCATI ON P RIVATE P OOL , F IDELITY B ALANCED C URRENCY N EUTRAL P RIVATE P OOL , F IDELITY B ALANCED I NCOME C URRENCY N EUTRAL P RIVATE P OOL , F IDELITY B ALANCED I NCOME P RIVATE P OOL , F IDELITY B ALANCED P RIVATE P OOL , F IDELITY

C ONCORD S TREET T RUST
- F IDELITY E XTENDED M ARKET I NDEX F UND , F IDELITY C ONCORD S TREET T RUST
- F IDELITY T OTAL M ARKET I NDEX F UND , F IDELITY I NCOME A LLOCATION F UND , FKA F IDELITY M ONTHLY H IGH I NCOME F UND , F IDELITY I NVESTMENTS , F IDELITY I NVESTMENTS C HARITABLE G IFT F UND , F IDELITY M ONTHLY I NCOME F UND , F IDELITY N ORTHSTAR F U ND , F IDELITY S MALL C AP I NDEX F UND , F IDELITY T OTAL M ARKET I NDEX F UND , SPDR S&P MIDCAP 400 ETF T RUST , T HE B ANK OF N EW Y ORK M ELLON , T RUSTEE , AKA BNY M ELLON MIDCAP SPDRS, T HE B ANK OF N EW Y ORK M ELLON , T RUSTEE , AKA BNY M ELLON MIDCAP SPDRS, S IDNEY K IMMEL , T HE S IDNEY K IMMEL R EVOCABLE I NDENTURE OF T RUST , J OHN D. D EMSEY , M ATTHEW H. K AMENS , J AMES A. M ITAROTONDA , B ARINGTON C OMPANIES E QUITY P ARTNERS , L.P., B ARINGTON C OMPANIES I NVESTORS , LLC, J EFFREY D. N UECHTERLEIN , L OWELL W. R OBINSON , J OSEPH T. D ONNALLEY , A IDA T EJERO
D ECOLLI , A MERICAN F AMILY M UTUAL I NSURANCE C O ., A MERICAN I NTERNATIONAL5 G ROUP I NC ., B ARBARA K REGER , B LUECREST C APITAL M ANAGEMENT L TD ., C ALVERT V ARIABLE P RODUCTS , I NC ., (C ALVERT VP R USSELL 2000 S MALL C AP I NDEX P ORTFOLIO ), C HI O PERATING I NVESTMENT P ROGRAM , LP, C HRYSLER W ORLD IMI E QUITY I NDEX
- ND, C REF E QUITY I NDEX A CCOUNT , D ANIEL F ISHMAN , D ONNA F. Z ARCONE , D REMAN C ONTRARIAN F UNDS , (D REMAN C ONTRARIAN S MALL C AP V ALUE F UND ), E ILEEN D UNN , E MERSON E LECTRIC C O ., EQ A DVISORS T RUST (ATM

S MALL C AP M ANAGED V OLATILITY P ORTFOLIO ), EQ A DVISORS T RUST (EQ/2000 M ANAGED V OLATILITY P ORTFOLIO ), E RIC D AUWALTER , F EDERATED E QUITY F UNDS (F EDERATED C LOVER S MALL V ALUE F UND ), F RANCES L UKAS , F RANCIS X C LAPS , G ABELLI I NVESTOR F UNDS I NC
. (T HE G ABELLI ABC F UND ), G ABELLI 787 F UND , I NC
. (E NTERPRISE M ERGERS AND A CQUISITIONS F UND ), G EORGE S HARP , G ERALD H OOD ,

G REGG M ARKS , G REGORY C LARK , H EATHER H ARLAN , H EATHER R OUSSEL , J AMES C APIOLA , J AMES C HAN , J AMES T. O STROWSKI , J AMIE C YGIELMAN , J ANET C ARR , J ANICE B ROWN , J ODI G. W RIGHT , J OSEPH A. R OSATO , J OSEPH S TAFINIAK , JPM ORGAN S YSTEMATIC A LPHA F UND , K ATHERINE B UTLER , K ATHLEEN N EDOROSTEK K ASWELL , KBC E QUITY F UND
- F ALLEN A NGELS , KBC E QUITY F UND
- L EISURE AND T OURISM , KBC E QUITY F UND
- S TRATEGIC S ATELLITES , L ARISSA S YGIDA , L INCOLN V ARIABLE I NSURANCE P RODUCTS T RUST , (LVIP SSGA S MALL
- C AP I NDEX F UND ) , L YNNE B ERNSTOCK , M ARY E. B ELLE , M ETROPOLITAN L IFE I NSURANCE C O , M ITCHEL L EVINE , M ULTIMANAGER S MALL C AP V ALUE P ORTFOLIO , N ATIONWIDE M UTUAL F UNDS , (N ATIONWIDE S MALL C AP I NDEX F UND ), N ATIONWIDE M UTUAL F UNDS , (N ATIONWIDE U.S. S MALL C AP V ALUE F UND ), N ATIONWIDE V ARIABLE I NSURANCE T RUST , (NVIT M ULTI
- M ANAGER S MALL C AP V ALUE F UND ), N ATIXIS SA, N ICOLETTA

P ALMA , N ORMAN R

. V EIT , J R ., O DIN H OLDINGS LP, O PPENHEIMER G LOBAL M ULTI S TRATEGIES F UND , P INEBRIDGE I NVESTMENTS LP, P RINCIPAL F UNDS I NC ., (S MALLCAP V ALUE F UND II), P RINCIPAL V ARIABLE C ONTRACTS F UNDS I NC ., (S MALLCAP V ALUE A CCOUNT I), P ROSHARES T RUST , (P ROSHARES M ERGER ETF), Q UANTITATIVE M ASTER S ERIES LLC, (M ASTER E XTENDED M ARKET I NDEX S ERIES ), RBB F UND , I NC ., (WPG P ARTNERS S MALL /M ICRO C AP V ALUE F UND ), R OBYN W HITNEY M ILLS , R OSA G ENOVESI , R OY C HAN , R OYCE I NSTITUTIONAL , LLC, (O PPORTUNITY P ORTFOLIO ), R USSELL U

. S

. S MALL C AP E QUITY F UND , S COTT B OWMAN , S ECURIAN L IFE I NSURANCE C O ., FKA M INNESOTA L IFE I NSURANCE C O ., SEI I NSTITUTIONAL I NVESTMENTS T RUST , (SIIT S MALL C AP F UND ), SEI I NSTITUTIONAL M ANAGED T RUST , (SIMT S MALL C AP V ALUE F UND ), S HARON H ARGER , S TEFANI G REENFIELD , S TEPHEN C. T ROY , S TUART W EITZMAN , S USAN D UFFY , S USQUEHANNA I NTERNATIONAL G ROUP LLP, S UZANNE K ARKUS , T ALCOTT6 R ESOLUTION L IFE I NSURANCE C O ., TFS C APITAL LLC, T HE A RBITRAGE E VENT
D RIVEN F UND , T HE GDL F UND , TIAA

- CREF F UNDS , TIAA

- CREF F UNDS (TIAA

CREF E QUITY I NDEX F UND ), TIAA

- CREF F UNDS (TIAA

- CREF S MALL
- C AP B LEND I NDEX F UND ), T OUCHSTONE F UNDS G ROUP T RUST (T OUCHSTONE A RBITRAGE F UND ), (T OUCHSTONE C REDIT O PPORTUNITIES II F UND ), T WO S IGMA I NVESTMENTS LP,

U NIFIED S ERIES T RUST (S YMONS S MALL C AP I NSTITUTIONAL F UND ), V ALUED A DVISERS T RUST (F OUNDRY P ARTNERS F UNDAMENTAL S MALL C AP V ALUE F UND ), V ANGUARD I NDEX F UNDS (V ANGUARD E XTE NDED M ARKET I NDEX F UND ), V ANGUARD I NDEX F UNDS (V ANGUARD S MALL
- C AP I NDEX F UND ), V ANGUARD I NDEX F UNDS (V ANGUARD S MALL
- C AP V ALUE I NDEX F UND ), V ANGUARD I NDEX F UNDS (V ANGUARD T OTAL S TOCK M ARKET I NDEX F UND ), V ANGUARD I NSTITUTIONAL I NDEX F UNDS (V ANGUARD I NSTITUTIONAL T OTAL S TOCK M ARKET

I NDEX F UND ), V ANGUARD I NSTITUTIONAL T OTAL S TOCK M ARKET I NDEX T RUST , V ANGUARD I NTERNATIONAL E QUITY I NDEX F UNDS (V ANGUARD T OTAL W ORLD S TOCK I NDEX F UND ), V ANGUARD R USSELL 2000 V ALUE I NDEX T RUST , V ANGUARD S COTTSDALE F UNDS (V ANGUARD R USS ELL 2000 I NDEX F UND ), V ANGUARD S COTTSDALE F UNDS (V ANGUARD R USSELL 2000 V ALUE I NDEX F UND ), V ANGUARD V ALLEY F ORGE F UNDS (V ANGUARD B ALANCED I NDEX F UND ), V ANGUARD W ORLD F UND (V ANGUARD C ONSUMER D ISCRETIONARY I NDEX F UND ), W AYNE K ULKIN , Z INE M AZOUZI , C OMMUNITY I NSURANCE C OMPANY , P RINCIPAL F UNDS I NC
. (G LOBAL M ULTI
- S TRATEGY F UND ), R ICHARD D ICKSON , R OBERT L. M ETTLER , B LUE C ROSS OF C ALIFORNIA , D IVERSIFIED A LPHA G ROUP T RUST , DT DV M ARKET C OMPLETION F UND , N ICOLA G UARNA , H AWAII DE LLC, G EORGE M. K LABIN , L ITMAN G REGORY

M A STERS A LTERNATIVE S TRATEGIES F UND , M ASTER S MALL C AP I NDEX S ERIES OF Q UANTITATIVE M ASTER S ERIES LLC, AKA I S HARES R USSELL 2000 S MALL
- C AP I NDEX F UND , PG AND E C O
. N UCLEAR F ACILITIES Q UALIFIED C PUC D ECOMMISSIONING M ASTER T RUST , R ESEARCH A FFILIATES E QUITY U

. S

. L ARGE , L.P., FKA E NHANCED

R AFI U

. S

. L ARGE LP, R OBERT R ODRIGUEZ , V ERICIMETRY U

. S

. S MALL C AP V ALUE F UND , R OBERT AND S USAN M ETTLER F AMILY T RUST U/A 3/27/06, R OBERT L. M ETTLER , S USAN T. M ETTLER , T RUSTEES , B AM A DVISOR S ERVICES , DBA L ORING W ARD , B LACK R OCK MSCI USA S MALL C AP E QUITY I NDEX F UND , B LUE S HIELD OF C ALIFORNIA , DAGT S MALL C AP O UTLIERS , E XTENDED E QUITY M ARKET F UND , AKA

B LACKROCK I NSTITUTIONAL T RUST C OMPANY , N.A., E XTENDED E QUITY M ARKET M ASTER F UND B, I S HARES E UROPE , I S HARES M ORNINGSTAR S MALL
- C AP V ALUE ETF,

I S HARES MSCI USA S MALL C AP UCITS ETF, I S HARES R USSELL 2000 ETF, I S HARES R USSELL 3000 ETF, G EORGE M P ACIFIC S ELECT F UND
- PD S MALL
- C AP V ALUE I NDEX7 P ORTFOLIO , P ACIFIC S ELECT F UND
- S MALL
- C AP E QUITY P ORTFOLIO , P ACIFIC S ELECT
F UND
- S MALL
- C AP I NDEX P ORTFOLIO , R USSELL 2000 A LPHA T ILTS F UND B, R USSELL 2000 I NDEX F UND , R USSELL 2000 I NDEX N ON
- L ENDABLE F UND , B LACKROCK R USSELL 2000 I NDEX N ON
- L ENDABLE F UND , R USSELL 2000 V ALUE F UND B, R USSELL

2500 I NDEX F UND , AKA I S HARES R USSELL S MALL /M ID
- C AP I NDEX F UND , R USSELL 3000 I NDEX F UND , AKA I S HARES T OTAL U.S. S TOCK M ARKET I NDEX F UND , SA U.S. S MALL C OMPANY F UND , S TATE S TREET N ORTH A MERICA C ONFIDENTIAL C LIENT 1 D OMESTIC E QUITIES , S TATE S TREET N ORTH A MERICA C ONFIDENTIAL C LIENT 1 D OMESTIC I S HARES 405, S TATE S TREET N ORTH A MERICA C ONFIDENTIAL C LIENT 1 FOF, U.S. E QUITY M ARKET F UND , U.S. E QUITY M ARKET F UND B, MSCI U.S. IMI I NDEX F UND B2, AKA B LACK R OCK MSCI U.S. IMI I NDEX F UND B2, M ERRILL L YNCH

P IERCE F ENNER AND S MITH I NCORPORATED , S TATE S TREET B ANK AND T RUST C O .,

P ACIFIC S ELECT F UND
- PD S MALL
- C AP V ALUE I NDEX P ORTFOLIO , R USSELL 3000 I NDEX N ON
- L ENDABLE F UND , S CHWAB T OTAL S TOCK M, U

. S

. S MALL C OMPANY F UND , T HE A RBITRATE F UND , DEF, A DVISORS S ERIES T RUST (K ELLNER M ERGER F UND ), D EFENDANT NY

- 1, B ETH B. D ORFSMAN , B ROWN B ROTHERS H ARRIMAN AND C O
. C LIENT N O
. 2, B ROWN B ROTHERS H ARRIMAN AND C O
. C LIENT N O
. 3, B RYAN R. G ILLIGAN , C ONSOLIDATED E DISON C OMPANY OF N EW Y ORK , I NC ., D YNAMIC C APITAL M ANAGEMENT , LLC, D YNAMIC O FFSHORE F UND L TD ., F EDEX C ORPORATION , D EFENDANT NY

- 8, G ARDNER L EWIS E VENT D RIVEN F UND , L.P.,

G OTHAM A BSOLUTE R ETURN F UND , GTE I NVESTMENT M ANAGEMENT C ORP ., H ALLADOR B ALANCED F UND LLC, H ARTFORD M UTUAL F UNDS II I NC
. (H ARTFORD

S CHRODERS U

. S

. S MALL C AP O PPORTUNITIES F UND ), H ARVEST S TREET C APITAL LLC, D EFENDANT NY

- 18, D EFENDANT NY

- 19, L AURIE J. G ENTILE , L EGG M ASON R OYCE U.S. S MALL C AP O PPORTUNITY F UND , L INDA V. K OTHE , L ORI L. G RACE , MFO M ANAGEMENT C OMPANY (T OWLE F UND ), M ICHAEL G. D EMKO , D EFENDANT

NY

- 24, M INNESOTA M INING AND M ANUFACTURING C O ., P ILLSBURY , P INNACLE W EST C ORP ., P RELUDE O PPORTUNITY F UND , LP, R OYCE F UND (R OYCE O PPORTUNITY F UND ), S TACEY A. H ARMON , T HE A RBITRAGE F UND , W ISDOM T REE A SSET M ANAGEMENT I NC ., W HITNEY L. S MITH , WCFS I NC ., V IRTU A MERICAS LLC, T UDOR T RADING I, LP, T RADITION S ECURITIES AND D ERIVATIVES I NC ., T OWLE C APITAL

P ARTNERS II LP, T OWLE C APITAL P ARTNERS LP, T HOMAS M. M URRAY PO N. M URRAY J T T EN , T HE H ARTFORD L IFE I NSURANCE C OMPANY , A LLIANZ G LOBAL I NVESTORS OF A MERICA L.P, G ARDNER L EWIS M ERGER A RBITRAGE F UND , L.P., G ARDNER L EWIS M ERGER A RBITRAGE F UND II, L.P., A NTHEM H EALTH P LANS OF V IRGINIA , I NC ., D IMENSIONAL F UNDS PLC U.S. S MALL C OMPANIES F UND , AKA I RISH8 U.S. S MALL C AP F UND , I NVESTMENT M ANAGERS S ERIES T RUST (T OWLE D EEP V ALUE F UND ), C ALIFORNIA P HYSICIANS ' S ERVICE , DBA B LUE S HIELD OF C ALIFORNIA , T OWLE D EEP V ALUE F UND , A LLIANZ A SSET M ANAGEMENT OF A MERICA L.P., FKA A LLIANZ G LOBAL I NVESTORS OF A MERICA LP, C OLLEGE R ETIREMENT E QUITIES

F UND (CREF E QUITY I NDEX A CCOUNT ), T OUCHSTONE F UNDS G ROUP T RUST (T OUCHSTONE M ERGER A RBITRAGE F UND ), T OUCHSTONE F UNDS G ROUP T RUST (T OUCHSTONE C REDIT O PPORTUNITIES II F UND ), W ISDOM T REE U.S. S MALL C AP D IVIDEND F UND , FKA W ISDOM T REE S MALL C AP D IVIDEND F UND , W ISDOM T REE U.S. S MALL C AP F UND , FKA W ISDOM T REE S MALL C AP E ARNINGS F UND , J OHN W. D EEM , Defendant s .

O N APPEAL FROM THE U NITED S TATES D ISTRICT C OURT FOR THE S OUTHERN D ISTRICT OF N EW Y ORK

Before: C HIN , S ULLIVAN , and B IANCO , Circuit Judges

.

Consolidated a ppeal s from a judgment and orders of the United States District Court for the Southern District of New York (Rakoff, J. ), dismissing claims arising from the leveraged buyout of an apparel and footwear
company in 2014 and the bankruptcy filing of its successor in 2018

. The bankruptcy trustees brought suit against defendants

- appellees

-- officers, directors, and shareholders of the company

-- claiming breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraudulent conveyance, unjust enrichment, and vari ous state law violations

. The bankruptcy trustees allege that9 the officers and directors arranged for the original company to merge with an affiliate of a private equity company and sold off its most valuable businesses to the private equity company 's other affiliates at a fraction of their value, leaving the surviving company with over $1.5 billion in debt, of which more than $1 billion was prior debt, and without its most successful product lines

. The district court dismissed the claims on the ground that the relevant transactions were shielded by the Bankruptcy Code ' s § 546(e) safe harbor provision.
A FFIRMED IN PART , V ACATED IN PART , AND R EMANDED
. Judge Sullivan concurs in part and dissents in part in a separate opinion.

E DWARD A. F RIEDMAN (Robert J. Lack, Stan Chiueh, on the brief ), Friedman Kaplan Seiler & Adelman LLP , New York, New York , for PlaintiffsAppellant s Marc S. Kirschner and Wilmington Savings F und Society, FSB, in all appeals except Docket Numbers 20

- 3334 and 20

- 3335

. A LLAN B. D IAMOND and R YAN M. L APINE , Diamond McCarthy LLP, Dallas, Texas and Los Angeles, California, for Plaintiffs

- Appellants Marc S. Kirschner and Wilmington Savings Fund Society, FSB, in Docket Numbers 20

- 3257, 20

- 3290, 20

- 3334, 20

- 3335, 20

- 3964, and 20

- 3980

.10 G REG G L. W EINER (Adam M. Harris and Andrew G. Devore, on the brief ), Ropes & Gray LLP, New York, New York and Boston, Massachusetts, for Defendant s- Appellee s Public Shareholders (Robeco Capital Growth Funds, et al .)

. Y. D AVID S CHARF (Danielle C. Lesser, on the brief ), Morrison Cohen LLP, New York, New York, for Defendants

- Appellees Individual Shareholders Mary E. Belle, Kathleen Nedorostek Kasw e ll, and Joseph Stafiniak

. H OWARD S EIFE , Norton Rose Fulbright US LLP, New York, New York, for Defendant

- Appell e e Individual Shareholder Wayne Kulkin

. S TUART K AGEN and C HRISTOP H ER G REENE , Kagen, Caspersen & Bogart, PLLC, for Defendants

Appellees Individual Shareholders Katherine Butler, Linda Kothe, Richard Hein, Richard H. Hein Rev. Trust U/ A 06/12/95, Mark DeZao, Janice Brown, Eric Dauwalter, Rosa Genovesi, Charles Pickett, Susan McCoy, Stacey Harmon, Kathleen O ' Brien, James Capiola, Laurie Gentile, and Robyn Mills

. K EVIN J. O'C ONNOR and S HANNON D. A ZZARO , Peckar & Abramson, P.C., New York, New York, for Defendants

- Appellees Individual Shareholders Heather Harlan and George Sharp

.11 C HIN , Circuit Judge : These cases arise from the leveraged buyout and subsequent bankruptcy of apparel and footwear company Jones Group, Inc. ( " Jones Group " ), which housed brands such as Nine West, Anne Klein, Stuart Weitzman, and Kurt Geiger. In 2014, private equity firm Sycamore Partners ( " Sycamore " ) acquired Jones Group through a merger with one of its subsidiaries and renamed the surviving company Nine West Holdings, Inc. ( " Nine West " )

. At the close of the merger, Sycamore sold three of Nine West ' s brands to newly formed Sycamore
affiliate s. A few years later, Nine West declared bankruptcy.
Plaintiffs

- appellants Marc Kirschner , as the Litigation T rustee for the Nine West Litigation Trust representing unsecured creditors , and Wilmington Savings Fund, FSB , as successor I ndenture T rustee for v arious notes issued by
Nine West (together, the " Trustees " ) , brought seventeen actions in different states against Jones Group ' s former directors and officers for unjust enrichment and against its former public shareholders for fraudulent conveyance, claim ing that
the directors and officers arranged the merger and sold the company ' s most valuable assets at a fraction of their value to consolidate debt with Nine West
and place Jones Group ' s most successful product lines outside the reach of Nine12 West ' s creditors. The Judicial Panel on Multidistrict Litigation transferred the
cases to the Southern District of New York for coordinated or consolidated pretrial proceedings. Both the public shareholders and the directors and officers moved to dismiss the claims against them, arguing that payments made to them
in connection with the merger are shielded by the Bankruptcy Code ' s § 546(e)
safe harbor. On August 27 , 2020, the district court (Rakoff, J. ) granted both motions to dismiss, holding that the payments were shielded by the safe harbor, as interpreted by In re Tribune Co

. Fraudulent Conv

. Litig

. (Tribune II) , 946 F.3d 66 , 72 (2d Cir. 2019) , cert. denied sub nom. Deutsche Bank Tr. Co. Americas v. Robert R.
McCormick Found. , 141 S. Ct. 2552 (2021)

. Plaintiffs appeal. We AFFIRM in part, VACATE in part, and REMAND for further proceedings

. BACKGROUND
Whe n reviewing a district court ' s grant of a motion to dismiss, we accept the material facts alleged in the complaint as true and draw all reasonable inferences in favor of the plaintiff

-- here, the T rustees. Altimeo Asset Mgmt. v. Qihoo 360 Tech. Co. , 19 F.4th 145, 147 (2d Cir. 2021)

.13 I. The Facts The following facts are drawn from the Trustees ' seventeen complaints , the exhibits attached thereto, and documents integral to and
referenced in them

. See Cohen v. Rosicki, Rosicki & Assocs., P.C. , 897 F.3d 75, 80 (2d Cir. 2018). We cite, as the district court did , specifically to the amended complaint filed in Kirschner et al. v. McClain et al. , No. 20

- cv - 4262, Dkt. No. 110 (the " Complaint " ) , though all cited allegations are also found in the other operative complaints.
A. The Merger In 2013, Sycamore proposed to acquire Jones Group through a leveraged buyout ( " LBO " ) transaction (the " Merger " )

. In preparation for the Merger , Sycamore created a holding company called Jasper Parent LLC ( " Jasper
Parent " ) and another entity called Jasper Merger Sub , Inc. ( " Jasper Merger Sub " ),

a wholly owned subsidiary of Jasper Parent. On December 19, 2013, Jones Group , Jasper Parent, and Jasper Merger Sub entered into a n agreement (the " Merger Agreement " ) , which governed the terms of the Merger . Pursuant to the Merger Agreement, Jones14 Group merge d with Jasper Merger Sub and continued as the surviving corporation

-- Nine West

. 1. The Certificate and DTC Transfer s The Merger Agreement outlined the terms for public shareholders to receive payments upon cancelation of their shares in Jones Group

. Jones Group ' s former public shareholders (the " Public Shareholders " ) receive d $15 for each share of common stock they owned when the M erger closed

. To implement
th o se payments, the Merger Agreement called for a " paying agent " to be hired

" pursuant to a paying agent agreement in customary form. " J. App ' x at 383 § 4.2(a). Jasper Parent and Jones Group hired Wells Fargo to act as a paying agent. The Paying Agent Agreement ( the " PAA " ) stated that the surviving corporation

-- Jones Group

-- " desires that the Paying Agent act as its special agent for the purpose of distributing the Merger Consideration " to the Public
Shareholders. J. App ' x at 217. 1 The Merger Agreement further provided that Jasper Parent would deposit with the P aying A gent

-- Wells Fargo

-- the aggregate amount of the merger consideration to be paid to the Public Shareholders. T he paying agent

1 Although the PAA identifies Jones Group as the surviving corporation, Jones Group thereafter merged with subsidiaries and eventually became Nine West.15 was to distribute these payments to the Public Shareholders. A majority of Jones Group shares were held as of record by Depository Trust Company ( " DTC " ) or in
electronic book

- entry form, although some shareholders held physical
certificates. Accordingly, we refer to these payments as the as the " DTC
Transfers " and the " Certificate Transfers , " r espectively.
Pursuant to the P AA , Nine West deposited $1.10 1 billion in an account at Wells Fargo for the purpose of paying the DTC Transfers and $4
million for the purpose of paying the Certificate Transfers . The P AA outlined in detail how Wells Fargo was to effectuate the payments. Wells Fargo ultimately
distributed the payments to the Public Shareholders

. 2. The Payroll Transfer The Merger Agreement also set forth the terms for former directors, officers, and employees of Jones Group (the " Individual Shareholders " ) to receive payment for their restricted shares, share

- equivalent units, and accumulated dividends on restricted stock at the close of the merger (the " Payroll Transfer " )

. Pursuant to the Merger Agreement, Jones Group paid $78 million to the
Individual Shareholders for th o se shares " through the payroll and by other16 means . " J. App ' x at 166 ¶ 135 ; see also id. at 385

. Wells Fargo was not involved in
th e s e transaction s . B. The Alleged Fraudulent Conveyances
A t the close of the Merger, Sycamore sold three of the brands housed by newly

- renamed

- Nine West

-- Stuart Weitzman, Kurt Geiger, and Jones Apparel (the " Carveout Assets " )

-- to then

- recently formed Sycamore affiliates (the " Carveout Transactions " ). The Trustees contend that , in doing so, Sycamore " transferred some of Jones Group ' s most valuable assets to Sycamore ' s affiliates

-- beyond the reach of Jones Group ' s creditors

-- for substantially below
fair market value. " J. App ' x at 142 ¶ 61(e). These tran sactions rendered the remaining Nine West business insolvent and " guaranteed that [Sycamore] would profit handsomely . . . no matter what happened to the post

- LBO [Nine West]. " J. App ' x at 142 ¶ 62 ; see also id. at 16 4 ¶ 130. 2

2 As the Public Shareholders highlight in their briefing, the Trustees " do not allege that the Public Shareholders were in any way involved in these Carveout Transactions, which were approved by the post

- LBO board after ownership of the company transferred to Sycamore. " Appellee ' s Br. at 10 (citing J. App ' x at 143 ¶ 66, 166 ¶ 136).17 C. The Bankruptcy On April 6, 2018, Nine West and several affiliate debtors filed a Chapter 11 petition in the United States Bankruptcy Court for the Southern District of New York. On February 27, 2019, the Bankruptcy Court confirmed a reorganization plan (the " Plan " ). Pursuant to the Plan, Sycamore paid Nine West ' s estate $120 million,
which cover ed the Carveout Transactions and thus the fraudulent transfer
claims.
II. The Proceedings Belo w A. The Consolidated Cases Beginning i n February 2020, Trustees commenced nineteen actions against more than 175 of Jones Group ' s former directors, officers, and
shareholders in various jurisdictions , seeking, in part, to avoid allegedly fraudulent payments made to them in connection with the LBO. Two of the nineteen actions were voluntarily dismissed without prejudice, and are not part of this appeal. The suits were transferred in multidistrict proceedings to the
Southern District of New York , where they were consolidated

.18 B. The Motion s to Dismiss On June 29, 2020, pursuant to a two

- phase briefing schedule set by the district court, the Public Shareholders filed motions to dismiss all fraudulent conveyance claims under the Bankruptcy Code ' s " safe harbor " provision. See 11 U.S.C. § 546(e). The Individual Shareholders joined the motions. The safe harbor defense limits a Chapter 11 bankruptcy trustee ' s power to avoid a transfer that is a settlement payment, as defined by the Code , made by or to (or for the benefit of) a financial institution, except in cases relating to actual fraudulent conveyance claims under § 548(a)(1)(A)

. See 11 U.S.C. § 546(e). On August 27, 2020, the district court dismissed seven of the seventeen actions, including the Trustees ' fraudulent conveyance and unjust
enrichment claims , relying in part on this Court ' s decision in Tribune II , 946 F.3d 66 (2d Cir. 2019). 3 It found that 11 U.S.C. § 546(e) barred p laintiffs ' fraudulent conveyance claims and, consequently, preempted their unjust enrichment

3 The dismissed actions were: 20

- cv - 4286, 20

- cv - 4289, 20

- cv - 4299, 20

- cv - 4434, 20

- cv - 4440, 20

- cv - 4479, and 20

- cv - 4480. Ten of the seventeen actions remain pending because each includes claims against directors, officers, or employees that have not been dismissed.19 claims. 4 On November 18, 2020, the district court granted certification pursuant to Federal Rule of Civil Procedure 54(b) for entry of partial final judgment dismissing the claims. Th ese consolidated appeal s followed.
STANDARD OF REVIEW
We review de novo a district court ' s grant of a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), accepting all factual allegations in the complaint as true and drawing all reasonable inferences in favor of the plaintiff. Giunta v. Dingman , 893 F.3d 73, 78

- 79 (2d Cir. 2018). We
also review de novo a district court ' s Rule 12(b)(6) dismissal based on an
affirmative defense. See Force v. Facebook, Inc. , 934 F.3d 53, 62 (2d Cir. 2019)

. A district court may grant a motion to dismiss for failure to state a claim on the basis of an affirmative defense only when facts supporting the defense appear on the face of the complaint. See, e.g. , Sewell v. Bernardin , 795 F.3d 337, 339 (2d Cir. 2015) ( " Dismissal under Fed. R. Civ. P. 12(b)(6) is appropriate when a defendant raises a statutory bar .

. . as an affirmative defense and it is clear from the face of the complaint, and matters of which the court may take

4 The district court dismissals were limited to the payments associated with common shares, restricted shares, share equivalent units, and accumulated dividends. It did not dismiss the unjust enrichment claims related to the change in control payments.20 judicial notice, that the plaintiff ' s claims are barred as a matter of law. " ) (citation omitted) . For purposes of this standard, " the complaint is deemed to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference. " Dixon v. von Blanckensee , 99 4 F.3d 95, 101 (2d Cir. 2021) (citation omitted)

. DISCUSSION
The Trustees contend that the payments they seek to avoid are not protected by the Bankruptcy Code ' s safe harbor and thus they ask this Court to
reverse the district court ' s judgment dismissing their claims

. Th ese case s present two main questions . First, the parties disagree as to the scope of the term " financial institution " as defined in 11 U.S.C. § 101(22)(A) . The Trustees argue that the definition encompasses bank customers only in transactions where the bank is acting as their agent , while
defendant s argue that it applies to any transaction related to a securities contract so long as the bank acted as their agent at one point in connection with that

contract . Second, the parties dispute whether Wells Fargo acted as Nine West ' s agent in the transactions at issue

. There are three relevant transactions: (1) the Certificate Transfers

-- Nine West deposited approximately $4 million with Wells Fargo , which , pursuant to the P AA ,21 distributed checks or wire transfers to the paper stock shareholders in exchange for their shares; (2) the DTC Transfers

-- Nine West deposited approximately $1.10 1 billion with Wells Fargo , which , pursuant to the P AA , distributed checks or wire transfers to the book

- entry shareholders in exchange for their shares; and (3) the Payroll Transfers

-- Nine West paid $78 million to Jones Group ' s directors, officers, and employee shareholders through its payroll program.
We hold that , for these purposes, " financial institution " includes bank customers only in transactions where the bank is acting as their agent and
that Wells Fargo acted as Nine West ' s agent in the Certificate and DTC Transfers but not in the Payroll Transfer s . We conclude , further, that under the transfer

by

- transfer interpretation of § 101(22)(A), Nine West was a " financial institution " with respect to the Certificate and DTC Transfers and those payments are therefore safe harbored under § 546(e) . The Payroll Transfer s , however, are not so shielded

. I. Statutory Backgro und The Bankruptcy Code identifies " circumstances under which a

trustee " may set aside (or avoid) " certain types of transfers and recapture the
value of those a voided transfers for the benefit of the estate. " Merit Mgmt. Grp

. ,22 LP v. FTI Consulting, Inc. , 138 S. Ct. 883, 888 ( 2018) (citing 11 U.S.C. §§ 544

- 53) (cleaned up)

. It also provides, however, " a number of limits on the exercise of these avoiding powers. " Id. at 889

. Section 546(e) of Chapter 11 of the Bankruptcy Code precludes
avoidance of " settlement payment[s] . . . made by or to (or for the benefit of) a

. . . financial institution, . . . or

. . . transfer[s] made by or to (or for the benefit of) a . . .
financial institution . . . in connection with a securities contract

. . . . " 11 U.S.C. § 546(e). The Code defines " financial institution " to include not only banks, but
also a customer of a bank " when [the bank] is acting as agent or custodian for a
customer . . . in connection with a securities contract. " Id. § 101(22)(A). 5 The two leading cases interpreting the safe harbor provision are Merit Management , 138 S. Ct. 883 (2018) , and Tribune II , 946 F.3d 66 (2d Cir. 2019). The Supreme Court held in Merit Management , 138 S. Ct. at 892, and we recognized in Tribune II , 946 F.3d at 77, that § 546(e) does " not protect transfers in
which financial institutions served as mere conduits. " I n Tribune II , however, we
concluded that an agency relationship provided an " alternative basis for finding that the payments [were] covered

. " 946 F.3d at 77 ; see also 11 U.S.C. § 101(22)(A)

.

5 11 U.S.C. § 741(7) defines the term " securities contract " broadly.23 There, we held that Computershare Trust Company ( " Computershare " ), a trust company and bank that the Tribune Company had hired as a depositary and paying agent, acted as the Tribune Company ' s " agent " in connection with the underlying LBO securities contract, rendering the Tribune Company a " financial
institution " and triggering the safe harbor for payments made in the LBO to the Tribune Company ' s public shareholders. 946 F.3d at 77

- 81. Section 546(e) has been uniformly recognized as an affirmative
defense , though not yet by this Court

. 6 We have, however, held that safe harbors in other statutory schemes are affirmative defenses. 7 Accordingly, we hold today that 11 U.S.C. § 546(e) is an affirmative defense.
D efendants therefore bear the burden of demonstrating that the

t ransfer s fall within the safe harbor. See , e.g. , Capitol Records , 826 F.3d at 94.

6 See 3 Howard J. Steinberg & Roy S. Geiger, Bankruptcy Litigation § 17:128, Responsive pleadings: A ffirmative defenses ( Oct. 2022 ), Westlaw BKRLIT (collecting cases); see also In re Tronox Inc

. , 503 B.R. 239, 339 (Bankr. S.D.N.Y. 2013 ) ( " Cases construing § 546(e) have uniformly treated it as an affirmative defense. " ). 7 See, e.g. , Capitol Records, LLC v. Vimeo, LLC , 826 F.3d 78, 94 (2d Cir. 2016) (holding that the Digital Millennium Copyright Act ' s service provider safe harbor is an affirmative defense that " must be raised by the defendant " and explaining " [t]he defendant undoubtedly bears the burden of raising entitlement to the safe harbor and of demonstrating that it has the status of a service provider " ); Saks v. Franklin Covey Co. , 316 F.3d 337, 350 (2d Cir. 2003) (holding that " ERISA preemption of state contract claims in a benefits

- due action is an affirmative defense that is . . . subject to waiver, if not pleaded in the defendant ' s answer . " ).24 Plaintiffs are under no obligation to plead facts supporting or negating an affirmative defense in the complaint. See, e.g. , Picard v. Citibank N.A. (In re Bernard L. Madoff Inv. Sec. LLC) , 12 F.4th 171, 195 (2d Cir. 2021) (first citing Fed. R. Civ. P. 8(c); and then citing Perry v. Merit Sys. Prot. Bd. , 137 S. Ct. 1975, 1987 n.9 (2017) ( " An affirmative defense to a plaintiff ' s claim for relief is not something the plaintiff must anticipate and negate in her pleading. " (cleaned up) ) ) , cert. denied
sub nom. Citibank, N.A. v. Picard , 142 S. Ct. 1209 (2022 )

. II. Qualifying Participant The payments at issue are safe harbored only if (1) Nine West, which made the payments, was a covered entity; or (2) the shareholders, who ultimately received the payments, were covered entities. See Tribune II , 946 F.3d
at 77. Nine West is a covered entity if it is considered a " financial institution " under § 101(22)(A). 11 U.S.C. § 101(22)(A). The district court interpreted section 546(e) of Chapter 11 of the Bankruptcy Code to mean that " when a bank is acting as an agent for a customer in connection with a securities contract, that customer counts as a ' financial institution, ' for the purposes of the § 546(e) safe harbor. " 482 F. Supp. 3d 187, 199 (S.D.N.Y. 2020). It therefore held that Nine West qualified as a " financial25 institution " and that all the transfers at issue were protected by the safe harbor.
Id

. The Trustees take issue with the district court ' s interpretation of 11
U.S.C. § 101(22)(A). The district court found that Wells Fargo acted as Nine
West ' s agent with respect to the Certificate Transfers and did not analyze the
other transfers. Rather, i t employed a " contract

- by

- contract " interpretation of § 101(22)(A) and concluded that, because Wells Fargo acted as Nine West ' s agent in the Certificate Transfers, and those transfers were made in connection with the Merger Agreement, Wells Fargo must be co nsidered Nine West ' s agent for every transfer made in connection with that contract and therefore any transfer made in connection with the LBO. Accordingly, it found that § 546(e) insulated all transfers made in connection with the LBO from avoidance, including ( 1 ) the
DTC Transfer s , in which Wells Fargo had a limited role; and ( 2 ) the Payroll
Transfer s , in which Wells Fargo played no role whatsoever

. The Trustees and amici argue that this Court ' s holding in Tribune II does not support such a reading of § 101(22)(A). We agree that the district court erred in applying a

" contract

- by

- contract " analysis, and conclude that the safe harbor applies only to
the Certificate and DTC Transfers and not to the Payroll Transfers

.26 We hold that § 101(22)(A) must be interpreted using a " transfer

- by

transfer " approach based on : (1) the language of the statute, (2) the statutory structure, and (3) the purpose of the safe

- harbor provision. First, t he Bankruptcy Code defines a " financial institution " to include

a " customer " of a bank or other such entity " when " the bank or other such entity

" is acting as agent " for the customer " in connection with a securities contract, " 11 U.S.C. § 101(22)(A) (emphasis added)

. It does not provide that a customer is
covered when a bank has ever acted as a customer ' s agent in connection with a
securities contract. In other words, the text creates a link between a bank " acting as agent " and its customer with respect to a transaction

. T o satisfy that link, t he plain language of § 101(22)(A) indicates that courts must look to each transfer
and determine " when " a bank " is acting as agent " for its customer for a transfer, assuming, of course, the transfer is made in connection with a securities contract.
To the extent the language of the statute is ambiguous, the transfer

by

- transfer approach is the more logical and reasonable interpretation

. A

contract

- by

- contract interpretation of § 101(22)(A) would lead to the absurd result of insulating every transfer made in connection with an LBO, as long as a bank served as agent for at least one transfer. C ourts should interpret statutes to27 avoid absurd results. See United States v. Wilson , 503 U.S. 329, 334 (1992); United
States v. Dauray , 215 F.3d 257, 264 (2d Cir. 2000)

. Indeed , at oral argument, counsel for the Individual Shareholders did not provide a clear answer when asked when, if ever, a transaction would fall outside the scope of § 546(e). Likewise, if this were indeed the law, we cannot imagine a circumstance in which a debtor would choose to structure an LBO without involving a bank, even in only a purely ministerial capacity. 8 U nder the contract

- by

- contract approach, the Payroll Transfers in this case would be covered by the safe

- harbor provision even though Wells Fargo had nothing to do with the $78 million in transfers paid through the payroll program. Second, the structure of the Bankruptcy Code supports the transfer

by

- transfer interpretation. As described above, t he Code grants trustees the authority to set aside or avoid certain transfers and recoup their value for the

estate

. Merit Mgmt. , 138 S. Ct. at 888 . While these general avoidance powers

" help implement the core principles of bankruptcy , " they are not unfettered

. See

8 For examples of parties "' structur[ing] ' their way out of liability under avoiding power statutes, " see Ralph Brubaker, Understanding the Scope of the § 546(e) Securities Safe Harbor Through the Concept of the "Transfer" Sought To Be Avoided , 37 Bankr. L. Letter 1 n.4 (July 2017) (quoting Jonathan M. Landers & Sandra A. Riemer, A New Look at Fraudulent Transfer Liability in High Risk Transactions , B US
. L. T ODAY , 1, 3 (Dec. 2016) ).28 i d. ( citation omitted). One limitation on trustees ' avoidance powers is § 546(e) ' s safe harbor provision. Id. To interpret that limitation broadly under the

contract

- by

- contract interpretation would be to undermine the avoidance power s that are so crucial to the Bankruptcy Code

. Third, the purpose of the safe harbor provision further supports the
transfer

- by

- transfer interpretation. Congress enacted the safe harbor in 1982 to shield certain transfers that, if avoided by trustees , could trigger systemic risk in
financial markets

. See Brubaker, supra , at 1, 13 ; see also Merit Mgmt. , 138 S. Ct. at
889

- 90 (citing Brubaker and providing more historical context)

. Interpreting the
safe harbor as broadly as defendants suggest would limit the avoidance power

even where it would not threaten the financial system

-- an expansion of the safe harbor provision likely not intended by Congress

. As we noted in Tribune II ,

" [t]he broad language used in Section 546(e) protects transactions rather than firms, reflecting a purpose of enhancing the efficiency of securities markets in order to reduce the cost of capital to the American economy. " 946 F.3d at 92 (emphasis added) (citation omitted) . Here, the Payroll Transfers were not paid through Wells Fargo and Congress ' s concerns about the settlement of securities
transactions are not implicated. See id. at 90

.29 The district court erred in adopting a " contract

- by

- contract " approach to hold that once Wells Fargo acted as Nine West ' s agent in one transaction, it is considered Nine West ' s agent in all the transactions. Applying
the transfer

- by

- transfer interpretation of 11 U.S.C. § 101(22)(A), we conclude that the Certificate and DTC Transfers are protected by the safe harbor, but the Payroll Transfers are not.
A. Certificate and DTC Transfers The Public Shareholders argue that the Trustees ' own pleading and documents demonstrate that Nine West hired Wells Fargo as an agent to effectuate payments to its shareholders in an LBO, the same role that Computershare played in Tribune II , thereby triggering the safe harbor for all payments made in the LBO to the Public Shareholders. We agree, but only as to
the Certificate and DTC Transfers.
The C omplaint alleges and related documents show that Wells Fargo made payments to, and received information from, the Public Shareholders during the Certificate and DTC Transfers. It did so on behalf of Nine West, and Nine West maintained control over the transactions. Thus,
under Tribune II , Wells Fargo acted as Nine West ' s agent during those30 transactions as a matter of law. See 482 F. Supp. 3d at 202 ( " Wells Fargo was
entrusted with millions of dollars of Nine West cash and was tasked with making payments on Nine West ' s behalf to Shareholders upon the tender of their stock certificates to Wells Fargo. " ) (cleaned up). In other words, facts supporting
the applicability of the § 546(e) defense to the Certificate and DTC Transfer claims appear on the face of the C omplaint , and the district court was correct in dismissing those claims.
B. Payroll Transfers The same cannot be said of the Payroll Transfer s . As to those
transfers , the C omplaint suggests that Wells Fargo did not make any payments
on behalf of Nine West. The C omplaint alleges that the Payroll Transfers " were processed through the payroll and by other means. " J. App ' x at 166 ¶ 135 (alleging that the Payroll Transfer payments " were processed through the payroll and by other means " ) ; 482 F. Supp. 3d at 205 ( " U nlike the common share payments,

. . . which were effectuated through Wells Fargo, plaintiffs allege that the payments for restricted shares, share equivalent units, an d accumulated
dividends ' were processed through the payroll and by other means. '" ) . In any event, it is undisputed that Jones Group ' s payroll processor, Automated Data31 Processing, Inc. ( " ADP " )

-- not Wells Fargo

-- made the payments, which totaled $78 million. 9 Two questions are thus presented: first, whether Wells Fargo took any other relevant action that created an agency relationship with Nine West during that transaction; and second, whether any such action render ed it Nine
West ' s agent as a matter of law. The parties disagree about the mechanism by which the restricted
shares and share

- equivalent units were canceled and, therefore, about the role Wells Fargo played in that transaction. The Trustees argue that Wells Fargo played little or no role in the Payroll Transfer s because (1) ADP made the payments and (2) the share s were automatically canceled by operation of law under the Merger Agreement. 10 In contrast, the Individual Shareholders argue

9 At oral argument , counsel for the Individual Shareholders conceded that ADP in fact made the payments. See Oral Argument at 2 4:52

- 2 5: 0 0, In re Nine West LBO Sec. Litig. (No. 20

- 3257 (L)), https://ww3.ca2.uscourts.gov/oral_arguments.html ; see also Appellants ' Br. at 8 ( " Discovery obtained while the motions to dismiss were pending confirmed that these transfers were processed by ADP, a payroll processor, which is neither a bank nor an agent. " ). 10 See Appellants ' Br. at 10 ( " The Merger Agreement gave the paying agent no authority to make any payment on account of restricted stock, accumulated dividends on restricted stock, or share equivalent units that were the subject of the Payroll Transfers. " ), 13

- 14 (Wells Fargo " played no role " in the Payroll Transfer), 49 ( " [T]he shares were canceled and simply ceased to exist. " ). At oral argument, plaintiffs ' counsel argued Wells Fargo ' s role as a transfer agent

-- what he described as stamping the word

" canceled " on a certificate

-- is not indicative of Nine West controlling Wells Fargo as a paying agent

. See Oral Argument at 33: 02

- 32

.32 that Wells Fargo completed a " critical element " that was " inherent " to the transaction by canceling the shares and thus that it acted as Nine West ' s agent during that transaction. 11 They do not elaborate on what that role entailed. We agree with the Trustees that the face of the C omplaint and relevant documents, viewed in a light most favorable to them, do not
demonstrate the existence of an agency relationship between Wells Fargo and Nine West during the Payroll Transfer s . To the extent Wells Fargo played any role in that transaction, the C omplaint plausibly alleges the role was purely ministerial because the shares were canceled automatically under, for example, the Merger Agreement provision that " all Restricted Shares and Share E quivalent
Units . . . shall automatically cease to exist " at the close of the M erger. J. App ' x at 386 § 4.3(c)

. The Individual Shareholders ask us to ignore the C omplaint and the Merger Agreement and look instead to the P AA . They first cite PAA § 1.3, which provides that Nine West " instructs and authorizes [Wells Fargo] to cancel all " restricted shares upon delivery and at the close of the merger. J . App ' x at 218 § 1.3. They then point to other provisions of the PAA that indicate Wells Fargo

11 Oral Argument at 2 5 : 4 0, 26: 11

.33 acted as Nine West ' s agent during the Certificate and DTC Transfers. Appellee ' s Br. at 36

- 37. For example, PAA § 4.2 provides that Nine West will reimburse Wells Fargo for expenses incurred in connection with its duties as paying agent , § 4.6 provides that Nine West will indemnify Wells Fargo for damages arising
from its role as paying agent , and § 5.3 outlines Wells Fargo ' s responsibilities in handling confidential data. 12 The Individuals Shareholders do not acknowledge, however, that Wells Fargo acted not as a paying agent with respect to the Payroll
Transfers , as it did in the Certificate and DTC Transfers, but as a transfer agent only. 13 The Individual Shareholders argue that because the PAA (1)

" instructs " Wells Fargo " to cancel " the shares involved in the Payroll Transfer s , and (2) establishes that Wells Fargo acted as Nine West ' s agent during the Certificate and DTC Transfers, it also establishes that Wells Fargo acted as Nine
West ' s agent during the Payroll Transfer s . We disagree. The PAA does not preclude the shares ' automatic cancelation under the Merger Agreement , and it is

12 The Individual Shareholders do not cite PAA § 2.10, which provides that Wells Fargo " shall maintain " certain records related to cancelation of the shares, as " required by applicable law and regulation, " J. App ' x at 22 1 , but that section arguably supports their position that Wells Fargo ' s role was more than purely ministerial. 13 See, e.g. , J. App ' x at 217 (specifically excluding the Restricted Shares when defining Wells Fargo ' s responsibilities as paying agent).34 at least plausible that cancelation was automatic. At best, Wells Fargo ' s role in canceling the shares, if any, is unclear. And to the extent Wells Fargo played any role, the record suggests that it was purely ministerial.
Even a ssuming , however, the C omplaint and related documents establish that Wells Fargo played even a ministerial role in canceling the shares, the next question is whether that action render ed it Nine West ' s agent as a matter of law. The answer is no, at least at this juncture of the case. The common law meaning of " agent " applies to 11 U.S.C. § 101(22)(A). Tribune II , 946 F.3d at 79. At common law, an agency relationship is created when a principal manifests assent to an agent that the agent will act on the principal ' s behalf and be subject to the principal ' s control, and the agent
manifests assent to the same. Id. (citing Restatement (Third) of Agency § 1.01 (2006)). In Tribune II , we held that an agency relationship was created when Tribune entrusted Computershare to pay its tendering shareholders, among other things. Id . at 7 9

. Here, Wells Fargo took some undefined ministerial action to cancel shares and, pursuant to PAA § 2.10, maintained related records as

" required by applicable law and regulation

. " J. App ' x at 22 1 (PAA § 2.10). The parties undoubtedly agreed that Wells Fargo would act on Nine West ' s behalf ,35 but, at this stage, it is not clear Nine West had any authority to control Wells Fargo ' s actions in canceling the shares. Because the control element is lacking, Wells Fargo ' s role as a transfer agent in the Payroll Transfer s is more accurately understood as that of an independent contractor, not an agent, as required by § 101(22)(A). Congress enacted the § 546(e) safe harbor to promote finality and certainty for investors by limiting the circumstances under which securities
transactions could be unwound by, for example, a successful fraudulent conveyance action

. 14 This Court ' s decision in Tribune II has already been criticized as broadening Merit ' s 15 interpretation of the safe harbor. 16 Affirming
the district court ' s dismissal of the Payroll Transfer claims based on Wells Fargo ' s role in canceling the shares would have even more drastic implications. To further expand the scope of § 546(e) and § 101(22)(A) and immunize transactions in which a bank took only purely ministerial action, made no payments, and had no discretion would not further Congress ' s purpose.

14 See Tribune II , 946 F.3d at 92 (citing H.R. Rep. No. 101

- 484 (1990), reprinted in 1990 U.S.C.C.A.N. 223, 224). 15 138 S. Ct. at 888

. 16 See, e.g. , Amicus Br. at 3 (characterizing Tribune II ' s holding as a " broad construction " of § 546(e) and § 101(22)(A), as explained in Merit ).36 Rather, it would introduce inefficiency into the securities market. As amic i explain in their Brief, such a decision would incentivize " large banks to aid and abet corporate looters " in LBOs because they could take little

- to

- no action on behalf of the debtor, " handsomely profit by collecting large structuring fees, " and rest assured they remain immune from liability. 17 Accordingly, we vacate the district court ' s judgment to the extent it
dismissed the Payroll Transfer claims

. III. Qualifying Transaction
As we have determined that Nine West is a qualifying participant pursuant to § 546(e) with re spect to the Certificate and DTC Transfers, we must next determine whether these payments are qualifying transactions under the safe harbor. A payment constitutes a qualifying transaction if it is a " settlement payment " or a " transfer made . . . in connection with a securities contract. " 11 U.S.C. § 546(e).

17 Amicus Br. at 29; see also id. ( " If the District Court ' s decision is affirmed, it would make it virtually impossible for a Trustee to ever bring a [fraudulent conveyance claim] against shareholders in the context of a high

- risk LBO, unless the purchaser walks into the closing with a giant bag of cash to pay th e selling shareholders. Such a result would not only lead to the proliferation of risky and disastrous LBO ' s -- it would encourage them! " ).37 The district court found " that the public shareholder transfers were
made in connection with a securities contract " for two reasons: (1) Tribune II , which similarly involved a two

- step LBO transaction, controls; and (2) the safe
harbor " covers not only contracts for the repurchase of securities but also any
other ' similar ' contract or agreement. " 482 F. Supp. 3d at 198. We agree.
Plaintiffs ' argument that the Merger Agreement is not a " securities
contract " because it provided for the cancelation of Jones Group shares is without merit. First, the merger agreement in the Tribune LBO similarly provided for the cancelation of shares and, there, this Court had " no trouble " concluding that the payments were made " in connection with a securities contract. " Tribune II , 946 F.3d at 81. Second, the Bankruptcy Code defines " securities contract " with

" extraordinary breadth " to include, for e xample, a " contract for the purchase or sale of a security, including any repurchase transaction on any such security, " as well as " any other agreement or transaction that is similar to an agreement or transaction referred to in this subparagraph. " Tribune II , 946 F.3d at 81 (cleaned up) ; see also 11 U.S.C. § 741(7)(A)(i), (vii).38 The district court also correctly held, in the alternative , " that the payments made to the shareholder defendants were ' settlement payments '

-- that is, transfers of cash made to complete the merger. " 482 F. Supp. 3d at 199. Under the Bankruptcy Code, a " settlement payment " is " a preliminary settlement payment, a partial settlement payment, an interim settlement payment, a settlement payment on account, a final settlement payment, or any other similar payment commonly used in the securities trade. " 11 U.S.C. § 741(8). This Court has held that a settlement payment includes a

" transfer of cash made to complete a securities transaction. " Enron Creditors Recovery Corp. v. Alfa, S.A.B. de C.V. , 651 F.3d 329, 33 9 (2d Cir. 2011) (c leaned up)

. Here, the Certificate and DTC Transfers were made pursuant to the Merger Agreement and for the purpose of effectuating the LBO . Therefore, the district court was correct to hold that these transfers qualified as settlement payments within the scope of § 546(e).
IV. Preemption The Litigation Trustee brought unjust enrichment claims against the
former directors and officers who allegedly played a key role in advocating for or approving the Merger. The district court found these claims were preempted by39 § 546(e) because they seek the same remedy as the Trustees ' fraudulent conveyance claims, which it found were safe harbored under that provision. T he Litigation Trustee argues that the district court erred because the " unjust
enrichment claims

-- which are asserted only against certain former Jones Group
directors and officers

-- differ in nature from [the Trustees ' ] fraudulent conveyance claims asserted against all shareholder defendants. " Appellants ' Br.
at 51.
In Tribune II , this Court addressed whether state law constructive fraudulent conveyance claims were preempted by § 546(e). 946 F.3d at 72. We analyzed § 546(e) ' s plain language and legislative history, as well as its scope after the Supreme Court ' s holding in Merit Management . 946 F.3d at 77

- 98. We reasoned that § 546(e) " was intended to protect from avoidance proceedings payments by and to commodities and securities firms in the settlement of
securities transactions or the execution of securities cont racts " and , therefore , state law claims that conflict with this purpose are preempted. 946 F.3d at 90. Here, the Trustees ' unjust enrichment claims that arise from the
Certificate and DTC Transfers conflict with th e purpose of § 546(e). The claims that arise from the Payroll Transfer s , however, do not similarly conflict with the40 statute because these payment s d o not fall under the safe harbor. As a result, we hold that the Trustees ' unjust enrichment claims arising from the Payroll
Transfer s are not preempted.
CONCLUSION For the reasons stated above, we VACATE the district court ' s judgment as to the Payroll Transfer claims , AFFIRM the remainder of the judgment, and REMAND for further proceedings consistent with this Court ' s decision.R ICHARD J. S ULLIVAN , Circuit Judge , dissenting in part : I agree with t he majority that the safe harbor created by section 546(e) of the Bankruptcy Code applies to Wells Fargo ’s payments to common - stock owners under the m erger a greement that facilitated Nine West’s leveraged buyout (the “ Merger Agreement” )

. I write separately to explain why, in my view, the safe
harbor should also apply to transfers that Nine West itself made to holders of
restricted shares under the Merger Agreement

. In reaching this conclusion , I reject the majority’s “ transfer

- by

- transfer ” approach for assessing whether “customers”
of “banks” are “financial institution s ” under section 101(22)(A) , which is central to determining whether the qualifying

- participant requirement under
section 546(e) is met

. Instead , I believe that the district court’s “ contract

- by

contract ” approach better comports with the plain meaning of section 101(22)(A) ’s

text and more faithfully gives effect to Congress’s purpose in enacting
section 546(e)

. I would therefore affirm the district court’s ruling in all respects.
I.
Under the Bankruptcy Code , trustees possess broad powers to avoid fraudulent conveyance s – that is, transfer s an insolvent debtor makes for little to
no consideration to certain parties

– so that fraudulently transferred property can2 be recaptured for the benefit of the bankruptcy estate and its creditors

. See 11 U.S.C. § § 548, 550(a), 551. N evertheless, Bankruptcy Code section 546
contains provisions

– known as safe harbors

– that insulate from avoidance certain
transfers made by a debtor . Of particular significance here is section 546(e) , which

creates a safe harbor for margin payments, s ettlement payment s, and transfers
made in connection with securities contract s . Section 546(e) provides, in relevant part, that “the trustee may not avoi d a transfer that ” (1) “ is a . . . settlement payment

. . . made by or to (or for the benefit of) a . . . financial institution ” or (2) “ is

. . . made by or to (or for the benefit of) a

. . . financial institution

. . . in connection
with a securities contract .” Id. § 546(e). Thus, to invoke the section 546(e) safe harbor, a transferee must identify both a qualifying transaction ( i.e. , a settlement payment or a transfer made in connection with a securities contract ) and a qualifying participant ( i.e. , a financial institution )

. See id. § 546(e).
The Trustees seek to claw back to the bankruptcy estate a series of payments that Nine West made to its shareholders, directors, and officers under the Merger Agreement. First , the Trustees try to avoid transfers made to holders of common

stock shares

– held either in electronic book

- entry form or as physical certificates

– that were cancelled and converted into the right to receive $15 per share3 (the “DTC and Certificate Transfers”). Second , the Trustees attempt to avoid payments for shares of restricted stock and stock equivalent units that were held by the company’s directors, officers, and employees , which were also cancelled and converted into the right to receive $15 per share, plus any unpaid dividends (the “Restricted Shares Transfers”). 1 The issue we must decide on appeal is
whether these transfers that Nine West and its agent Wells Fargo made to
company shareholders are shielded by section 546(e) from the Trustees ’ avoidance
powers . I I
. To begin, the majority and I agree that the qualifying

- transaction requirement under section 546(e) is satisfied for all of the DTC, Certificate, and Restricted Shares
Transfers , since they were “transfer payment[s]

. . . made in connection with a
securities contract” or “settlement payment[s].” Id. § 546(e )

. Indeed, the Merger Agreement from the Nine West leveraged buyout was, in all relevant respects,
identical to the “securities contract” in Tribune , which similarly cancelled shares and converted them into rights to cash payments

. See In re Trib. Co. Fraudulent

1 Relatedly, Nine West also paid approximately $71 million in change

- in

- control payments to its directors and officers. The Trustees concede that their claims relating to the se change

- in

- control payments are “not a subject of this appeal.” Trustees Br. at 6 & n.2.4 Conv. Litig. , 946 F.3d 66, 80

– 81 (2d Cir. 2019); compare also J. App’x at 488

– 89 (Tribune Merger Agreement § 2.1(a)), with id. at 383 (Nine West Merger Agreement § 4.1(a)) . The transfers were also “settlement payments , ” since they
involved “transfer[s ] of cash

. . . made to complete a securities transaction

. ” Enron Creditors Recovery v. Alfa, S.A.B. de C.V. , 651 F.3d 329, 334

– 35 (2d Cir. 2011) (alteration omitted)

. This is true for not only the DTC and Certificate Transfers,

s ee J . App’x at 383

– 85 (Merger Agreement § § 4.1, 4.2), but the Restricted Shares
Transfers as well , see id. at 385

– 86 (Merger Agreement § 4.3 )

. I II
. But the qualifying

- participant inquiry is not so clear

- cut. To identify a qualifying participant , courts look to whether the transfer was “made by or to (or for the benefit of) a . . . financial institution.” 11 U.S.C. § 546(e). In turn, a
“financial institution” is defined as (1) “ a Federal reserve bank, or an entity that is a commercial or savings bank, industrial savings bank, savings and loan association, trust company, federally[ ]insured credit union , or receiver, liquidating agent, or conservator for such entity ” or (2) a “customer” of one of
these entities “when [the] entity is acting as agent or custodian for [the] customer5 . . . in connection with a securities contract (as defined in section 741) .” Id. § 101(22)(A). 2
T he majority and I agree that the qualifying

- participant inquiry is straightforward for the DTC and Certificate Transfers . That is, these transfers were carried out by Nine West’s agent , Wells Fargo , which was a qualifying participant for the simple reason that a “bank” is an enumerated entity under the
first clause of section 101(22)(A)

. And since the se transfers were also qualifying
transactions , as discussed above , they are safe from the Trustees’ avoidance
powers under the section 546( e ) safe harbor

. We disagree, however, as to whether Nine West itself was a qualifying participant when it made the Restricted Shares Transfers. This disagreement
stems from our conflicting readings of the “customer clause” of section 101(22)(A) , which states that a customer is a “financial institution” when an enumerated

c overed entit y under th at subsection is act ing as an agent for the customer in
connection with a securities contract

. Put another way , we must decide whether

a customer’s status as a “financial institution” turns on whether its agent is acting

2 Section 101(22)(B) also identifies a third type of “financial institution”

– namely, “an investment company registered under the Investment Company Act of 1940” that is acting “in connection with a securities contract,” 11 U.S.C. § 101(22)(B)

– which is not relevant for purposes of this dissent

.6 in connection with the securities contract (the “contract

- by

- contract” approach) or whether its agent is acting in connection with the specific transfer made by the

customer (the “transfer

- by

- transfer” approach). 3
A. As is usually the case with statutory interpretation , the relevant inquiry begin s – and end s – with the plain meaning of the statutory text

. See Ret. Bd. of the Policemen’s Annuity & Ben. Fund of Chi. v. Bank of N.Y. Mellon , 775 F.3d 154, 165 (2d Cir. 2014 ) ; see also Spadaro v. United States Customs & Border Prot. , 978 F.3d 34, 46 (2d Cir. 2020) ( “ [W] hen the language of a statute is unambiguous, judicial inquiry is complete.” (internal quotation marks omitted) ). I t is appropriate then
to start where the district court did by noting that section 101(22)(A) provides that

“ a customer of a bank qualifies as a financial institution ‘when [ the bank ] is acting as agent

. . . in connection with a securities contract .’ ” Sp. App’x at 39 (quoting
11 U.S.C. § 101(22)(A) (alteration in original ) ). Under the plain meaning of this

3 To be clear, there are two “in connection with a securities contract” requirements at play here. One is found under the qualifying

- transaction prong of section 546(e) itself. See 11 U.S.C. § 546(e). The other is found in the customer clause of section 101(22)(A) , which implicates the qualifying

participant prong of section 546(e)

. See id. § 101(22)(A). The “contract

- by

- contract” versus “transfer

- by

- transfer” dispute relates to the interpretation of section 101(22)(A)

. It stands to reason , of course, that the securities contract for both sections must be the same for the safe harbor to apply , and here there is no question that all of the transfers were made pursuant to the same Merger Agreement

.7 statutory language, it follows that once a customer is deemed a “financial
institution” because a bank is acting as its agent in connection with a securities
contract ( under the qualifying

- participant prong ) , each and every transfer the

customer makes pursuant to that securities contract ( under the qualifying

transaction prong ) is shielded by the section 546(e) safe harbor

. Indeed, it is telling that Congress elected to limit the scope of a customer’s status as a “financial institution” by inserting the “in connection with a securities contract” language into the statute

. 11 U.S.C. § 101(22)(A). Had Congress simply omitted this language, so that a customer of a bank is a “financial institution” “when” the “bank” “is acting as agent” of the customer, then there would be ambiguity as to whether “is acting as agent” should be construed broadly ( i.e. , an y agency relationship will suffice ) or narrowly ( i.e. , the agency relationship must
per tain to a particular transfer). Here, Congress chose to pair “is acting as agent”
with “in connection with a securities contract, ” thereby limiting a customer’s
“financial

- institution” status to when its agent is acting in precisely that capacity.
See United States v. Butler , 297 U.S. 1, 65 (1936) (“The[] words [of a statute] cannot be meaningless, else they would not have been used.”).8 It also bears noting that , out of all the terms at its disposal , Congress settled

on the phrase “securities contract (as defined in section 741)

. ” This defined term
is set forth in capaciously broad language under s ection 741(7)

. See 11 U.S.C. § 741(7)(A)(i), (vii) (defining “ securities contract ” as, among other things, “ any . . . agreement

. . . that is similar to” an agreement “for the

. . . sale[]

. . . of a security” (emphasis added)); see also Tribune , 946 F.3d at 81 (2d Cir. 2019) (acknowledging the “extraordinary breadth” of this definition ( internal quotation marks omitted))

. This indicates to me that , by incorporating this definition of “securities contract,” Congress intended for the customer clause to be interpreted in a n expansive

manner . T he majority disputes this interpretation, opt ing instead for a narrower transfer

- by

- transfer approach to the customer clause. According to the majority, if Congress truly intended to enact the b road rea ding endorsed by the district
court, i t would have instead drafted section 101(22)(A) to say that a customer of a bank qualifies as a financial institution “ when a bank has ever acted as a customer’s agent in connection with a securities contract

. ” Maj. Op. at 2 7

. But Congress had

no obligation to use the majority’s pr of fered language, and in any event, the language it did use

– “ is acting as agent

. . . in connection with a securities9 contract , ” 11 U.S.C. § 101(22)(A)

– is broad enough to reach the disputed transfers in this case, without being as boundless as the majority implies

. In fact, it is t he majority that effectively rewrites section 101(22)(A) so that a “customer” qualifies as a “financial institution” only “when [ the bank] is acting as agent

. . . in
connection with a securities transfer .” Sp. App’x at 39 ( emphasis added and alteration in original)

. Tellingly, section 101(22)(A) makes no mention of the word “transfer,” and instead grants “financial[

- ]institution” status to a customer when a bank is acting as agent “in connection with a securities contract .” 11 U.S.C. § 101(22)(A) (emphasis added)

. B y substituting “transfer” for “contract,” the majority impermissibly “ alter [s] , rather than

. . . interpret [s] , the [text of
section 101(22)(A)]

. ” Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania , 140 S. Ct. 2367, 2381 (2020)

. Practically speaking , t he majority’s transfer

- by

- transfer approach render s
section 101(22)(A)’s entire customer clause meaningless when read in conjunction
with section 546(e) , since it would cover no ground not already covered by the first
enumerated

- entities clause

. Under the view espoused by the majority, the
section 546(e) safe harbor only protects transfers that are made by a bank. I t is
evident , however, that sections 546(e) and 101(22)(A) contemplate that some10 transfers “made by” the “customer” of a “ bank ” are also covered by the safe
harbor

. 11 U.S.C. §§ 546(e), 101(22)(A). After all, if section 546(e) covered only transfers “made by” a “financial institution” in the form of a “bank,” what would be the point of section 101(22)(A)’s language specifying that a “financial
institution” can also be “a customer” of a “ bank ” in certain circumstances? Id.
The majority’s reading

– which would read the entire customer clause out of the

statute

– cannot be right. See Reiter v. Sototone Corp. , 442 U.S. 330, 339 (1979) (“In construing a statute[,] we are obliged to give effect, if possible, to every word Congress used.”).
What’s more , even if we were to delve into “Congress’s intent ” in enacting section 546(e) , the majority’s arguments overlook the fact that Congress clearly balanced the goal of protect ing creditors’ rights through the trustees’ avoidance
powers against the competing goal of “ minimiz[ing] the displacement caused in
the commodities and securities markets in the event of a major bankruptcy affecting those industries .” Tribune , 946 F.3d at 9 2 (internal quotation marks and alteration omitted)

. As t his Court has recognized , the former “ cannot

. . . trump [] ”
the latter. Id. at 94. Indeed, we have acknowledged that “ the legislative history’s mention of bankrupt ‘customers’ or ‘other participants’ and

. . . the broad statutory11 language defining the transactions covered ” “ reflected [Congress’s] larger
purpose ” in enacting the statute

– namely, “ to promote finality and certainty for investors, by limiting the circumstances

. . . under which securities transactions
could be unwound.” Id. (internal quotation marks and alteration s omitted). Against this legislative backdrop reflecting Congress’s intended goal of
“enhanc ing the efficiency of securities markets in order to reduce the cost of capital to the American economy ,” I see no reason to limit the reach of the section 546(e)
safe harbor by ignoring section 101(22)(A)’s customer clause in its entirety

. Id. at
92 (quoting Bankruptcy of Commodity and Securities Brokers: Hearings Before
the Subcomm. o n Monopolies and Commercial Law of the Comm. o n the Judiciary, 47th Cong. 239 (1981) ) ; see also H. R. Rep. No. 101

- 484, at 2 (1990) , reprinted in 1990 U.S.C.C.A.N. 223, 224

. To be sure, t he majority’s narrow reading of section 101(22)(A) would be

more plausible if Congress had expressed a limited intent to protect only

“ commodities and securities firms in the settlement of securities transactions or the
execution of securities contracts

. ” Tribune , 946 F.3d at 90

– 91 (emphasis added).
But this Court has squarely rejected such an interpretation of section 546(e). See id.

at 91

– 92 (explaining that the “broad language” of section 546(e)

– i.e. , “limitations12 on avoidance of transfers made by a ‘customer’ of a financial institution ‘in
connection with a securities contract ’ ”

– indicate s that Congress “intended to protect the [securities] process or market ” as a whole, “rather than [just] firms” (citation omitted) ). In actuality , the majority’s analysis appears to be driven by policy concerns about how a textual reading of the statute might affect creditors, shareholders, and other bankruptcy stakeholders in future bankruptcies that occur in the wake of leveraged buyouts

. See Maj. Op. at 2 7

– 30 & n. 8 . But the Supreme Court has warned, in this very context, that concerns over matters of policy cannot be used to justify “deviat[ions] from the plain meaning of the language used in [section] 546(e).” Merit Mgmt. Grp., LP v. FTI Consulting, Inc. , 138 S. Ct. 883, 897 (2018). At any rate, the majority fails to explain why unwinding securities payments made by corporate entities themselves introduces any less “systemic
risk , ” Maj. Op. at 29

– 30, than the voiding of transfers made by firms or other
market intermediaries

. E ach threatens the finality of securities transactions, thereby undermin ing confidence in the entire securities market

. See Tribune , 946 F.3d at 9 2 ( “ T he broad language used in [s]ection 546(e) protects [securities]
transactions rather than [just] firms , reflecting a purpose of enhancing the efficiency13 of securities markets in order to reduce the cost of capital to the American economy.” (emphasis added) )

. And there is no doubt that if companies, institutional investors, or large shareholders face financial instability because
securities transactions are undone years after leveraged buyouts are consummated , this would pose significant “threat[ s ] [to] the financial system .” Maj. Op. at 29

– 30. Likewise , the majority opinion’s cursory ipse dixit about a broad section 546(e) safe harbor “ i ntroduc [ing] inef ficienc[ies], ” id. at 37 (emphasis added), is accompanied by no reasoning as to how a textual reading of
section 546(e) yield s an outcome that is less pareto efficient than the majority’s approach . All told, the majority opinion’s vague gestures at market effects cloak
what are , in rea l it y, nothing more than its subjective views of what is “reasonable.” Maj. Op. at 28. But it is not the prerogative of this Court to disturb the delicate
balance struck by Congress between creditors’ interests and those of shareholders
based on what we perceive to be fair or reasonable

. See Anderson v. Wilson , 289 U.S. 20, 27 (1933) (“We do not pause to consider whether a statute differently conceived and framed would yie ld results more consonant with fairness and reason. We take the statute as we find it.”).14 B. Having settled on the contract

- by

- contract approach to defining “financial
institutions ” under section 101(22)(A) ’s customer clause , I would hold that the qualifying

- participant prong under section 546(e) is satisfied for not only the DTC and Certificate Transfers, but also the Restricted Shares Transfers

. Like the majority , I have no trouble concluding that Wells Fargo was acting
as Nine West’s “ agent ” with regard to the DTC and Certificate Transfers

. See Tribune , 946 F.3d at 77

– 79 ( holding that depositary that received and made payments for tendered shares on company’s behalf in connection with a leveraged buyout was an “agent” under s ection 101(22)(A ) ). T here is no dispute that these
transfers were made by Wells Fargo , which acted as Nine West’s “agent ” given
the role it played in cancel l ing shares and making payments to shareholders. Specifically , the Merger Agreement provided that payments for cancelled shares would be effectuated by a “paying agent

. . . pursuant to a paying agent agreement in customary form.” J. App’x at 383. And i n turn, the paying agent agreement designated Wells Fargo as the paying agent and empowered it to “act as [Nine West’s] special agent for the purpose of distributing the Merger15 Consideration,” hold funds that Nine West deposited for the shareholder transfers, and ultimately cancel t he company’s common stock

. Id. at 217 , 218, 221

. Unlike the majority, I am convinced that the qualifying

- participant prong is
also satisfied for the Restricted Shares Transfers

. Given Wells Fargo’s role in effectuating the DTC and Certificate Transfers, Nine West meets the definition of

a “financial institution ” by virtue of its status as a “customer” of a “bank” that “ is acting as agent” “in connection with a securities contract ”

– in this case, the Merger Agreement. Because Nine West meets the requirements of a qualifying participant , and because the transfers in question satisfy section 546(e) ’s qualifying

- transaction prong , there can be no doubt that the Restricted Shares Transfers are sheltered by the safe harbor

. 4
IV
. For all of these reasons, I dissent from the majority’s opinion to the extent that it permits the Trustee s to claw back the Restricted Shares Transfers under the Merger Agreement as avoidable fraudulent conveyances . While I agree with the

4 G iven my view that the DTC, Certificate, and Restricted Shares Transfers are protected from the Trustees’ avoidance powers under section 546(e), it follows that all state

- law constructive and intentional fraudulent conveyance claims brought by creditors or noteholders (and thereby the Trustees representing these individuals) and all unjust

- enrichment claims against the company’s directors and officers must be preempted. See Tribune , 946 F.3d at 90

– 97.16 majorit y that sections 546(e) and 101(22)(A) bar the Trustee s f rom avoid ing the payments made to shareholders via the DTC and Certificate Transfers , I cannot
agree with the majority ’s interpretation of “financial institution” under
section 101(22)(A) , which improperly strip s the Restricted Shares Transfers of section 546(e) immunity from the Trustees’ avoidance powers. To my mind , Congress spoke with unmistakable clarity in fashioning the section 546(e) safe
harbor , which applies to a customer of a bank when that bank is acting as agent “in
connection with a securities contract

. ” 11 U.S.C. § § 546(e) , 101(22)(A)

. Because the
securities contract in this case

– the Merger Agreement

– makes clear that Wells Fargo was acting as Nine West’s agent in connection with that contract, Nine West
meets the definition of a “ financial institution ” under section 101(22)(A) and its payments for the Restricted Shares Transfers are properly subject to
section 546(e)’s safe harbor. As a result, I would affirm the judgment of the district court in all respects.