Why file a bankruptcy case here instead of there? An entity, and moreso a group of entities, may be legally permitted to file for bankruptcy in any one of a number of judicial districts – also referred to as venues. A prospective debtor should carefully consider where to file its bankruptcy petition. Courts in different venues do not uniformly interpret all provisions of the Bankruptcy Code and its procedural rules. Different legal standards exist most often because of conflicting decisions rendered by the circuit courts of appeal, which bind all lower courts in the respective circuits, but not courts in other circuits (e.g., standards for rejecting a collective bargaining agreement, or for cutting off product liability claims against successors to debtor, such as a purchaser or reorganized debtor). In addition, different bankruptcy courts take different views when it comes to approving certain initial requests (so-called “first day motions”) filed on an expedited basis by a debtor with its bankruptcy petition (e.g., to authorize a debtor to pay the pre-petition claims of “critical” vendors right away, instead of through a confirmed plan).
This article was submitted by Dustin R. DeNeal, Faegre Baker Daniels LLP. If you would like to submit content or write an article for the Commercial & Bankruptcy Law Section, please email Kara Sikorski at firstname.lastname@example.org.