Representatives Reintroduce Bankruptcy Venue Reform Act in US Congress
Reps. Zoe Lofgren (D-Calif.) and Ben Cline (R-Va.) today introduced the “Bankruptcy Venue Reform Act,” bipartisan legislation that requires that chapter 11 proceedings take place where the principal place of business or principal assets of a company are located. The bill has been introduced in both chambers in previous sessions of Congress. “Bankruptcies should be adjudicated locally in a court familiar with all the affected stakeholders, not in some court all the way across the country,” Lofgren said. Cline agreed, adding that “[v]enue shopping erodes trust in the process and shuts out the very people most affected by these decisions.” The bill has the support of the Commercial Law League of America, the Boston Bar Association, the Maryland-D.C. Creditors Bar Association, the Business Law Section of the Florida State Bar and the Business Law Section of the California Lawyers Association.
Comment of The Bankruptcy Law Firm, PC: Many previous bills seeking to reform bankruptcy venue have failed, even though bankruptcy venue needs to be reformed to keep corporations from shopping for favorable venue in which to file corporation bankruptcy cases.