On January 8, 2018 Senators John Cornyn (R-TX) and Elizabeth Warren (D-MA) introduced a bipartisan bankruptcy venue reform bill as S. 2282 entitled the Bankruptcy Venue Reform Act of 2018 to rebalance where commercial Chapter 11 bankruptcy cases are commenced. The proposed law eliminates the place of incorporation in favor of filing where the debtor's principal place of business or principal assets are located. It will also eliminate the affiliate-filing loophole. The result of this effort will make it more likely that local bankruptcy cases will be decided at home.
Retired Bankruptcy Judge Steven Rhodes (Bankr. E. D. Michigan) commented in the Wall Street Journal that the current venue law is "the single most significant source of injustice in chapter 11 bankruptcy cases." The National Association of Credit Managers recently asserted that venue shopping in bankruptcy cases "creates significant obstacles for trade creditors .... and increases the cost of participation." S. 2282 will put an end to the rampant forum shopping permitted under the current statutory regime.
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