CPX-351 in Treating Patients With Relapsed or Refractory Acute Myeloid Leukemia or Myelodysplastic Syndrome

Inclusion Criteria: * Ability to understand and voluntarily give informed consent * Age ≥ 60 * Pathological diagnosis of AML (by WHO criteria) or higher risk MDS (includes int-2 and high risk MDS by IPSS) along with one of the following: * Patients with de novo or secondary MDS with progression/refractoriness after HMA treatment who have not transformed to AML * Patients with MDS and prior HMA treatment for MDS who transform to AML * Patients with AML who are refractory/relapsed after HMA therapy for their AML are eligible * Life expectancy \> 1 month * Eastern Cooperative Oncology Group (ECOG) performance status 0-2 * Able to adhere to the study visit schedule and other protocol requirements * Laboratory values fulfilling the following: * Serum creatinine \< 2.0 mg/dL * Serum total bilirubin ≤ 2.5 mg/dL. Note, patients with Gilbert's syndrome may have elevated bilirubin at baseline prior to diagnosis with AML or MDS. Patients with Gilbert's syndrome are included if their total bilirubin is ≤ 2 times their baseline total bilirubin. * Serum alanine aminotransferase or aspartate aminotransferase \< 3 times ULN * Cardiac ejection fraction ≥ 45% by echocardiography (transthoracic echocardiography) or MUGA scan * Patients with second malignancies may be eligible at discretion of PI given acute life threatening nature of untreated AML or higher risk MDS. Patients maintained on long-term non-chemotherapy treatment, e.g., hormonal therapy, are also eligible. Exclusion Criteria: * Patients who have previously undergone allogeneic hematopoietic stem cell transplant will be excluded from this study * Patients who have previously had \> 368 mg/m2 cumulative dose of daunorubicin or \> 368 mg/m2 daunorubicin-equivalent anthracycline therapy (for example, from prior treatment of solid tumors). See appendix for anthracycline equivalence table. * Acute promyelocytic leukemia \[t(15;17)\] * Any serious medical condition, laboratory abnormality or psychiatric illness that would prevent obtaining informed consent * Patients who have had conventional intensive cytotoxic induction chemotherapy for treatment of specifically MDS or AML are excluded. * Patients who have not previously been treated with HMA therapy will be excluded * Clinical evidence of active CNS leukemia * Patients with evidence of uncontrolled current myocardial impairment (e.g. unstable ischemic heart disease, uncontrolled arrhythmia, symptomatic valvular dysfunction not controlled on medical therapy, uncontrolled hypertensive heart disease, and uncontrolled congestive heart failure) * Active and uncontrolled infection. Patients with an active infection receiving treatment and hemodynamically stable for 48 hours may be entered into the study * Known active uncontrolled HIV or hepatitis C infection * Known hypersensitivity to cytarabine, daunorubicin or liposomal products * Known history of Wilson's disease or other copper-related disorders * Other medical or psychiatric illness or organ dysfunction or laboratory abnormality which in the opinion of the investigator would compromise the patient's safety or interfere with data interpretation * Laboratory abnormalities: * Serum creatinine ≥ 2.0 mg/dL * Serum total bilirubin \> 2.5 mg/dL. Note, patients with Gilbert's syndrome may have elevated bilirubin at baseline prior to diagnosis with AML or MDS. Patients with Gilbert's syndrome are excluded if their total bilirubin is \> 2 times their baseline total bilirubin. * Serum alanine aminotransferase or aspartate aminotransferase \> 3 times ULN