District of Delaware Bankruptcy Judge Mary F. Walrath denies motion of Citibank National Association (“Citibank”) to dismiss the bankruptcy preference avoidance complaint for failure to state a claim for relief. In her March 26, 2012 opinion, Judge Walrath holds that Citibank failed to establish that the transfers sought to be avoided were “settlement payments” protected by section 546(e). Distinguishing the recent decision in Official Comm. of Unsecured Creditors of Quebecor World (USA) Inc. v. Am. United Life Ins. Co. (In re Quebecor), 453 B.R. 201 (Bankr. S.D.N.Y. 2011), Judge Walrath finds that the transfers were to “collateralize Citibank’s exposure under a [letter of credit]” issued to secure payment of industrial revenue bonds. Although the transfers to Citibank were used to retire these industrial revenue bonds, the transfers to Citibank were not solely for the purpose of completing a securities transaction but also had the purpose of fulfilling an “obligation independent from any securities transaction”.