                               In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 15-3388
FTI CONSULTING, INC.,
                                                  Plaintiff-Appellant,

                                 v.

MERIT MANAGEMENT GROUP, LP,
                                                 Defendant-Appellee.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
            No. 11 C 7670 — Joan B. Gottschall, Judge.
                     ____________________

      ARGUED MARCH 30, 2016 — DECIDED JULY 28, 2016
                     ____________________

   Before WOOD, Chief Judge, and POSNER and ROVNER, Circuit
Judges.
    WOOD, Chief Judge. This case requires us to examine sec-
tion 546(e) of the Bankruptcy Code, which provides a safe har-
bor protecting certain transfers from being undone by the
bankruptcy trustee. (We considered a different aspect of that
statute in Peterson v. Somers Dublin Ltd., 729 F.3d 741 (7th Cir.
2013), which focused on what counts as a settlement payment
made in connection with a securities contract, questions that
2                                                    No. 15-3388

do not arise in our case.) The safe harbor prohibits the trustee
from avoiding transfers that are “margin payment[s]” or “set-
tlement payment[s]” “made by or to (or for the benefit of)”
certain entities including commodity brokers, securities clear-
ing agencies, and “financial institutions.” 11 U.S.C. § 546(e). It
also protects transfers “made by or to (or for the benefit of)”
the same types of entities “in connection with a securities con-
tract.” Id.
    Ultimately, we find it necessary to answer only one ques-
tion: whether the section 546(e) safe harbor protects transfers
that are simply conducted through financial institutions (or
the other entities named in section 546(e)), where the entity is
neither the debtor nor the transferee but only the conduit. We
hold that it does not, and accordingly we reverse the judg-
ment of the district court.
                                I
    This question has arisen in the bankruptcy proceeding of
Valley View Downs, LP, owner of a Pennsylvania racetrack.
In 2003, Valley View Downs was in competition with another
racetrack, Bedford Downs, for the last harness-racing license
in the state. Both racetracks wanted to operate “racinos”—
combination horse track and casinos—and both needed the
license to do so. Rather than fight over one license, Valley
View and Bedford agreed to combine and conquer: Valley
View would acquire all Bedford shares in exchange for $55
million. The exchange of the $55 million for the shares was to
take place through Citizens Bank of Pennsylvania, the escrow
agent. Valley View borrowed money from Credit Suisse and
some other lenders to pay for the shares. After the transfer,
Valley View obtained the harness-racing license, but it failed
No. 15-3388                                                     3

to secure the needed gambling license. This led it to file for
Chapter 11 bankruptcy.
     FTI Consulting, Inc., as Trustee of the In re Centaur, LLC et
al. Litigation Trust, which includes Valley View Downs as one
of the debtors, brought this suit against Merit Management
Group (“Merit”), a 30% shareholder in Bedford Downs. FTI
alleges that Bedford’s transfer to Valley View and thence to
Merit of approximately $16.5 million (30% of the $55 million),
is avoidable under Bankruptcy Code sections 544,
548(a)(1)(b), and 550, and the money is properly part of Valley
View’s bankruptcy estate and thus the Litigation Trust.
    There is no question that the transfer at issue is either a
“settlement payment” or a payment made “in connection
with a securities contract.” Merit maintained that the transfer
was “made by or to (or for the benefit of)” an entity named in
section 546(e) and therefore protected under the safe harbor.
It did not rely on its own status for this argument, because it
is undisputed that neither Valley View nor Merit is a com-
modity broker, forward contract merchant, stockbroker, fi-
nancial institution, financial participant, or securities clearing
agency (the entities named in section 546(e)). Instead, Merit
argued eligibility for the safe harbor based on the minor in-
volvement of Citizens Bank and Credit Suisse. The district
court agreed with Merit, finding that the transfers were
“made by or to” a financial institution because the funds
passed through Citizens Bank and Credit Suisse. It granted
judgment on the pleadings pursuant to Federal Rule of Civil
Procedure 12(c) in Merit’s favor, thereby preventing FTI from
avoiding the transfer and recovering the $16.5 million. FTI ap-
peals.
4                                                    No. 15-3388

                                II
   We review the district court’s Rule 12(c) judgment on the
pleadings de novo. Buchanan-Moore v. Cnty. of Milwaukee, 570
F.3d 824, 827 (7th Cir. 2009). There are no contested facts.
                                A
    In order to resolve this case, we must ascertain the mean-
ing of section 546(e). We begin at the obvious place, with its
text:
    [T]he trustee may not avoid a transfer that is a margin
    payment … or settlement payment … made by or to (or
    for the benefit of) a commodity broker, forward con-
    tract merchant, stockbroker, financial institution, fi-
    nancial participant, or securities clearing agency, or
    that is a transfer made by or to (or for the benefit of) a
    commodity broker, forward contract merchant, stock-
    broker, financial institution, financial participant, or
    securities clearing agency, in connection with a securi-
    ties contract … .
(Emphasis added.) It is impossible to say in the abstract what
the italicized words, “by or to,” mean here. As FTI points out,
a postcard sent through the U.S. Postal Service could be said
to have been sent “by” the Postal Service or “by” the sender
who filled it out. When a person pays her bills using an elec-
tronic bank transfer, the funds could be said to be sent “by”
the owner of the account or by the bank. Similarly, a transfer
through a financial institution as intermediary could reason-
ably be interpreted as being “made by or to” the financial in-
stitution or “made by or to” the entity ultimately receiving the
money. The plain language does not clarify whether, under
No. 15-3388                                                     5

the statute, the transfer of the $16.5 million was made by Val-
ley View to Merit; by Valley View to Citizens Bank; by Citi-
zens Bank to Credit Suisse; or by Citizens Bank or Credit
Suisse to Merit. These multiple plausible interpretations re-
quire us to search beyond the statute’s plain language. (We
reject Merit’s argument that FTI has waived the right to argue
that the statute is ambiguous; it urged the district court to con-
sider the purpose and context of the statute, which implicitly
indicates that the meaning is not immediately clear.)
    The phrase “for the benefit of,” which was added to the
safe harbor in a 2006 amendment, is also ambiguous. It could
refer to a transaction made on behalf of another entity, or it
could mean a transaction made merely involving an entity re-
ceiving an actual financial or beneficial interest. The latter
reading suggests that transactions between parties other than
the named entities receiving a financial interest (but related to
those entities) are also included in the safe harbor—otherwise
the additional parenthetical would be redundant. If the for-
mer interpretation is used, FTI’s argument that the whole
phrase refers only to named entities receiving a financial in-
terest—whether or not that entity received the actual transfer
of property—is plausible.
    The language of the statute, standing alone, does not point
us in one direction or the other. In particular, it is unclear
whether the safe harbor was meant to include intermediaries,
or if it is limited to what we might think of as the real parties
in interest—here, the first and the final party possessing the
thing transferred. We therefore turn to the statute’s purpose
and context for further guidance. See Food & Drug Admin. v.
Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000)
6                                                     No. 15-3388

(courts must interpret a “statute as a symmetrical and coher-
ent regulatory scheme, and fit, if possible, all parts into an har-
monious whole”) (internal quotation marks and citations
omitted); Davis v. Michigan Dep't of Treasury, 489 U.S. 803, 809
(1989) (“It is a fundamental canon of statutory construction
that the words of a statute must be read in their context and
with a view to their place in the overall statutory scheme.”).
                                B
                                1
    Section 546(e) appears in Subchapter III of Chapter 5 of the
Bankruptcy Code, which deals with what property is in-
cluded within the estate. While section 546 covers limitations
on a trustee’s avoidance powers, other sections—in particular
sections 544, 547, and 548—set out types of transfers that a
bankruptcy trustee can avoid. Section 550 describes how to
recover the funds from transfers that are avoidable. The trus-
tee’s avoidance powers serve the broad purpose of ensuring
the equitable distribution of a debtor’s assets.
    Section 544 gives the trustee the power to avoid transfers
that would be voidable by a creditor extending credit to the
debtor at the commencement of the case, if that creditor had
a judicial lien or an unsatisfied execution against the debtor,
or by a bona fide purchaser. 11 U.S.C. § 544(a). It allows the
trustee to act as such a creditor or bona fide purchaser. Id.
Section 547 allows the trustee to avoid any transfer of any in-
terest of the debtor “to or for the benefit of a creditor,” made
within 90 days before the filing (or longer if the creditor was
an insider) and the transfer was more than the creditor would
otherwise have received. Id. § 547(b). Section 548(a) allows
No. 15-3388                                                    7

avoidance of transfers done with fraudulent intent and trans-
fers that rendered a debtor insolvent.
    FTI argues that because these other Chapter 5 sections es-
tablish that only transfers “made by the debtor” prior to the
bankruptcy petition are avoidable, transfers “made by” a
named entity in section 546(e) ought also to refer to a transfer
of property by the debtor. Additionally, FTI argues that be-
cause sections 544, 547, and 548 refer to avoidance of transfers
to or for the benefit of entities subject to fraudulent-transfer
liability, section 546(e)’s safe harbor must refer only to trans-
fers made to a named entity that is a creditor.
    We agree with FTI. Chapter 5 creates both a system for
avoiding transfers and a safe harbor from avoidance—logi-
cally these are two sides of the same coin. It makes sense to
understand the safe harbor as applying to the transfers that
are eligible for avoidance in the first place.
   Merit responds that sections 544, 547, and 548 implicate
obligations “incurred by” a debtor, as opposed to transfers
“made by” a debtor, and therefore Chapter 5 read as a whole
does not support the argument that only transfers made by a
debtor that constitute obligations incurred by a debtor are
within 546(e)’s safe harbor. We see it differently. If anything,
the “incurred by” language in the other sections supports
FTI’s position. Because the safe harbor is meant to protect cov-
ered entities against avoidance where it might occur, the fact
that sections 544, 547, and 548 permit avoidance only where
the transfer represents an actual obligation means that 546(e)
provides a safe harbor only where the debtor has incurred an
actual obligation to the covered entity.
8                                                   No. 15-3388

    Merit also argues that Chapter 5 allows avoidance of
transfers other than those made directly by the debtor, be-
cause “indirect transfers made by third parties to a creditor
on behalf of the debtor may also be avoidable.” Warsco v. Pre-
ferred Technical Grp., 258 F.3d 557, 564 (7th Cir. 2001). There-
fore, Merit concludes, FTI’s “attempt to simplify section
548(a)(1) to avoidance only of ‘transfers made by a debtor’ is
simply not supported.” But Warsco is irrelevant to FTI’s posi-
tion, as it does not speak to avoiding transfers involving fi-
nancial intermediaries. The $16.5 million transfer to Merit was
not a transfer made on behalf of a debtor by a third party; ra-
ther, it was one made by the debtor using a bank as a conduit.
                               2
    Section 548(a)(1) allows a trustee to avoid transfers “of an
interest of the debtor in property, or any obligation … in-
curred by the debtor” within two years of bankruptcy if the
debtor made the transfer with either (A) the “actual intent to
hinder … or defraud” an entity to which the debtor was in-
debted, or where (B) the debtor received less money for the
transfer than its value, or was insolvent on the date of transfer
or became insolvent because of the transfer, or made the
transfer to benefit an insider. 11 U.S.C. § 548.
    Section 548(c) exempts from avoidance a transferee or ob-
ligee that “takes for value and in good faith has a lien on or
may retain any interest transferred or may enforce any obli-
gation incurred … to the extent that such transferee or obligee
gave value to the debtor in exchange for such transfer or obli-
gation.” Id. § 548(c). Section 548(d)(2) adds that a commodity
broker or financial institution or other protected entity that
receives a margin or settlement payment “takes for value to
No. 15-3388                                                    9

the extent of such payment” within the meaning of subsection
(c).
    FTI points out that section 548(d)(2)’s protections apply
only where the defendant in a fraudulent-transfer action is
one of the types of entities listed in section 546(e). It reasons
that Congress cannot have intended to give an entity not
listed under section 548(d)(2)(B) a defense simply because it
deposited its funds in a bank account. It is the receipt of the
value that gives a fraudulent-transfer defendant the protec-
tions of section 548(d)(2)(B), and it should similarly be the re-
ceipt of value that gives an entity the safe-harbor protections
of 546(e).
    Merit responds that 548(c) creates a transferee-specific af-
firmative defense, unlike section 564(e), which addresses the
transfer and not the transferee. But we see no reason to differ-
entiate between the two. Merit’s preferred interpretation
would be so broad as to render any transfer non-avoidable
unless it were done in cold hard cash, and that conflicts with
section 548(c)’s good faith exception.
                               3
    FTI also finds support in the charitable-contribution safe
harbor found in section 548(a)(2), as well as in section 555’s
safe harbor from enforcement of the Bankruptcy Code’s auto-
matic stay. Section 548(a)(2) shields charitable contributions
made “by a natural person” “to a qualified” charity from
avoidance by a trustee. FTI contends that the “by” and “to”
language in section 548(a)(2) should be read consistently with
section 546(e), because doing otherwise would lead to an ab-
surd result: charitable contributions made via wire transfer,
10                                                  No. 15-3388

or perhaps even with an old-fashioned paper check, through
a bank would be avoidable.
    Section 555 allows the same entities as those named in sec-
tion 546(e), where they are counterparties to a securities con-
tract with the debtor, to enforce an ipso facto clause in a secu-
rities contract despite the Code’s general prohibition on non-
debtor counterparties enforcing those clauses. See id. §§ 555,
365(e), 362(a). FTI argues that we should read these sections
consistently. Because section 555 focuses on the economic
substance of the transaction, applying only where the named
entity is a counterparty as opposed to a conduit or bank for a
counterparty, section 546(e)’s safe harbor should apply in the
same manner. We agree with FTI that it is the economic sub-
stance of the transaction that matters.
                               4
    Section 550 describes how the trustee is to recover avoida-
ble transfers. The trustee can recover the property or its value
from the “initial transferee” or “any immediate or mediate
transferee.” Id. § 550. It protects good faith transferees who
did not know of the voidability of the transfer, and “any im-
mediate or mediate good faith transferee of such transferee.”
Id.
    Although Section 550 allows recovery from a “mediate”
transferee, the question how money may be recovered is dif-
ferent from the question from whom money may be recovered.
Although mediate transferees may be required to return
funds to which they are not entitled under the Bankruptcy
Code’s avoidability provisions, mediate transferees are not el-
igible for the safe harbor because they lack a financial stake
comparable to that of a debtor or a party to whom a debt is
No. 15-3388                                                   11

owed. Section 550 also contains a good-faith exception to pro-
tect unknowing mediate transferees, and so such transferees
should not need the safe harbor.
    In Bonded Financial Services, Inc. v. European American Bank,
we defined “transferee” as an entity with “dominion over the
money” or “the right to put the money to one’s own pur-
poses.” 838 F.2d 890, 893 (7th Cir. 1988). We found that a bank
that “acted as a financial intermediary” and “received no ben-
efit” was not a “transferee” within the meaning of Chapter 5
of the Bankruptcy Code. Id. Although we did not address the
546(e) safe harbor specifically, we now extend our reasoning
in Bonded to find that transfers “made by or to (or for the ben-
efit of)” in the context of 546(e) refer to transfers made to
“transferees” as defined there. We reject Merit’s argument
that Bonded does not apply because, rather than providing a
defense, section 546(e) renders a transfer unavoidable. We see
no reason why the unavoidability provisions should be
broader than defenses to recovery; if anything, the opposite
should be true.
                               C
    The history of section 546(e) also supports the position we
take here, and illustrates why our holding will not give rise to
problems in the financial-services markets. Congress first en-
acted the safe harbor in response to a New York federal dis-
trict court decision: Seligson v. New York Produce Exchange, 394
F. Supp. 125 (S.D.N.Y. 1975). In Seligson, the trustee of a com-
modity broker’s bankruptcy estate sued the New York Pro-
duce Exchange and the New York Produce Exchange Clear-
ing Association to recover payments the broker made to the
Association in connection with cottonseed oil futures, which
declined in value drastically. 394 F. Supp. at 126–27. The court
12                                                   No. 15-3388

denied summary judgment, finding a triable issue of fact on
the questions whether the Association was a “transferee”
within the meaning of the Bankruptcy Code’s avoidability
provisions, and whether the Exchange could be held liable be-
cause of its relationship with the Association. Id. at 134, 136–
37.
    Congress responded in 1982 by creating the safe harbor,
which enabled financial institutions that were recipients of
transfers of the kind that took place in Seligson to invoke a safe
harbor from avoidance. Pub. L. No. 97-222, § 4, 96 Stat. 235
(1982). Congress later expanded the safe harbor to other types
of actors in the securities industry, including financial institu-
tions. See Pub. L. No. 98-353, § 441, 98 Stat. 333 (1984). Noth-
ing it did, however, indicated that the safe harbor applied to
those institutions in their capacity as intermediaries. The safe
harbor has ample work to do when an entity involved in the
commodities trade is a debtor or actual recipient of a transfer,
rather than simply a conduit for funds.
    Our interpretation is consistent with this understanding of
the law. As we explained in Grede v. FCStone, LLC, the safe
harbor’s purpose is to “protect[] the market from systemic
risk and allow[] parties in the securities industry to enter into
transactions with greater confidence“—to prevent “one large
bankruptcy from rippling through the securities industry.”
746 F.3d 244, 252 (7th Cir. 2014). Congress’s discussion of the
2005 amendments to the Code, passed as part of the Bank-
ruptcy Abuse Prevention and Consumer Protection Act,
reemphasized the safe harbor’s purpose as reducing “sys-
temic risk in the financial marketplace.” H.R. Rep. 109-31(I),
at 3, reprinted in 2005 U.S.C.C.A.N. 88, 89.
No. 15-3388                                                   13

   Although we have said that section 546(e) is to be under-
stood broadly, see Grede, 746 F.3d at 246 (“[t]he code has a
broad exception from avoidance or clawback … for payments
made to settle securities transactions”), that does not mean
that there are no limits. While Valley View’s settlement with
Bedford resembled a leveraged buyout, and in that way
touched on the securities market, neither Valley View nor
Merit were “parties in the securities industry.” They are
simply corporations that wanted to exchange money for pri-
vately held stock.
    We are not troubled by any potential ripple effect through
the financial markets from returning the funds to FTI. The safe
harbor addresses cases in which the debtor-transferor or
transferee is a financial institution or other named entity. See
H.R. Rep. 97-420, at 1, reprinted in 1982 U.S.C.C.A.N. 583 (dis-
cussing the extension of the 546(e) safe harbor to the securities
market to avoid “the insolvency of one commodity or security
firm spreading to other firms and possibl[y] threatening the
collapse of the affected market”). Valley View’s bankruptcy
will not trigger bankruptcies of any commodity or securities
firms. Even if Valley View’s bankruptcy were to “spread” to
Merit after avoidance of the transfer, there is no evidence that
it would have any impact on Credit Suisse, Citizens Bank, or
any other bank or entity named in section 546(e). Nor are we
persuaded that the repercussions of undoing a deal like this
one outweigh the necessity of the Bankruptcy Code’s protec-
tions for creditors. We will not interpret the safe harbor so ex-
pansively that it covers any transaction involving securities
that uses a financial institution or other named entity as a con-
duit for funds.
14                                                    No. 15-3388

                                 D
     We recognize that we are taking a different position from
the one adopted by five of our sister circuits, which have in-
terpreted section 546(e) to include the conduit situation. See
In re Quebecor World (USA) Inc., 719 F.3d 94 (2d Cir. 2013)
(finding safe harbor applicable where financial institution
was trustee and actual exchange was between two private en-
tities); Contemporary Indus. Corp. v. Frost, 564 F.3d 981, 987 (8th
Cir. 2009) (finding § 546(e) not limited to public securities
transactions, and exempting from avoidance Chapter 11
debtor’s payments that were deposited in a national bank in
exchange for shareholders’ privately-held stock during lever-
aged buyout, as settlement payments made to financial insti-
tution); In re QSI Holdings, Inc., 571 F.3d 545, 551 (6th Cir. 2009)
(finding HSBC’s role in a leveraged buyout “sufficient to sat-
isfy the requirement that the transfer was made to a financial
institution” although it was only the exchange agent); In re
Resorts Int'l, Inc., 181 F.3d 505, 516 (3d Cir. 1999) (noting that
“the requirement that the ‘commodity brokers, forward con-
tract merchants, stockbrokers, financial institutions, and secu-
rities clearing agencies’ obtain a ‘beneficial interest’ in the
funds they handle … is not explicit in section 546”); In re Kaiser
Steel Corp., 952 F.2d 1230, 1240 (10th Cir. 1991) (rejecting Kai-
ser’s argument that “even if the payments were settlement
payments, § 546(e) does not protect a settlement payment ‘by’
a stockbroker, financial institution, or clearing agency, unless
that payment is to another participant in the clearance and
settlement system and not to an equity security holder”).
    One circuit, however—the Eleventh—agrees with us. In
Matter of Munford, Inc., the Eleventh Circuit found sec-
tion 546(e) inapplicable to payments made by Munford to
No. 15-3388                                                    15

shareholders because financial institutions were involved
only as conduits. 98 F.3d 604, 610 (11th Cir. 1996). Merit con-
tends that Congress disapproved Munford by passing the 2006
Amendment adding “(or for the benefit of),” see H.R. Rep.
109-648, at 23, reprinted in 2006 U.S.C.C.A.N. 1585, 1593, and
that Congress was responding to the Eleventh Circuit’s lan-
guage in Munford that “[t]he bank never acquired a beneficial
interest in either the funds or the shares.” 98 F.3d at 610. Merit
would interpret the amendment as listing acquiring a benefi-
cial interest as only one way of several to satisfy the require-
ments (the other way being making or receiving a transfer).
The Second Circuit has agreed with this position. See Que-
becor, 719 F.3d at 100 n.3.
    We do not believe that Congress would have jettisoned
Munford’s rule by such a subtle and circuitous route. Its addi-
tion of an alternate way to meet the safe harbor criteria says
nothing about the method already in the statute. If Congress
had wanted to say that acting as a conduit for a transaction
between non-named entities is enough to qualify for the safe
harbor, it would have been easy to do that. But it did not.
                               III
     Because we find that section 546(e) does not provide a safe
harbor against avoidance of transfers between non-named en-
tities where a named entity acts as a conduit, we REVERSE the
judgment of the district court and REMAND for proceedings
consistent with this opinion.
