Jurisdiction: Venue
| ID | Name | Group | Other | Code
Sec |
Cross
Ref | Problem
Referenced | Proposed
Solutions |
NBRC-
0005 | Richard L. Haeussler | Law Offices of
Richard L. Haeussler. Sole practitioner who represents chapter 7 &
13 Debtors. |
| 1408(1) | 1409 | Irvine Company was able to file in Michigan despite the fact that
all of its creditors and business were located in Irvine,
CA. | Congress should exclude state of
incorporation as permitted venue. |
NBRC-
0025 | Robert B. Millner | Past-Co-Chair ABA
Bankr. Insol. Comm. & Sonnenschein Nath &
Rosenthal |
| 1408(1) |
| Bankruptcy venue should be amended to eliminate place of
incorporation as possible venue. Often no meaningful contacts in place
of incorporation. Imposes a burden and inconvenience on
creditors. | Place of incorporation as well as
residence and domicile as possible venues for fictitious entities
including corporations. Should return to former Bankruptcy Rule 116(a)
of the Act which distinguished between fictitious entities and
individuals in establishing permitted venues. |
NBRC-
0028 | Jeffrey L. Solomon | Advocacy Vice
Chair of General Practice, Solo & Small Firm Section of
ABA |
| 1408(1) |
| Place of incorporation venue causes the disenfranchisement of
smaller and regionally located creditors. No principled basis to retain
place of incorporation as valid venue. | Adopts proposal of ABA Insol. Comm. - Return to rule under Act
that distinguished between fictitious entities for bankruptcy
venues. |
NBRC-
0030 | Francis L. Carter | Bankruptcy
Practitioner - Coll Davidson Carter Smith Salter &
Barkett | July Invited participant - Small
Business Working Group. | 1408(1) |
| Bankruptcy Venue should be amended to eliminate place of
incorporation as a permitted venue. | Agrees
with ABA proposal to adopt Rule under Act to distinguish between
fictitious and nonfictitious entities for venue purposes. |
NBRC-
0034 | Andrew R. Turner | Attorney at Conner
& Winters. |
| 1408(1) |
| Bankruptcy venue in state of incorporation is often an
inconvenient forum to smaller creditors. | Eliminate place of incorporation as a valid venue
option. |
NBRC-
0035 | Jon D. Schneider | Attorney. Goodwin,
Procter & Hoar |
| 1408(1) |
| Current venue statute is being abused and leading to poor public
perception of bankruptcy process. Promotes competition among courts as
to which one will be most favorable to debtors and fee friendly.
Perception of debtor-friendly courts where fees are excessive. Burdens
on smaller creditors is less of a consideration. Perception is that
bankruptcy is a "hidden, confused, and unfair
process." | Debtor's attorney should be
required to file an affidavit as to the specific basis for venue and the
court should have an obligation to decide whether venue is proper
immediately at the commencement of a case. Procedural reform is
required to prevent further abuses. |
NBRC-
0036 | John A. Lapinski | Attorney; Clark
& Trevithick |
| 1408(1) |
| Current venue statute permits forum-shopping; is unfair to
creditors; increases the cost of bankruptcies and has led to a wide
public perception of abuse and unfairness in the bankruptcy
system. | Section 1408(1) should be amended to
eliminate place of incorporation or organization as permitted venue for
filing of bankruptcy by corporations and other fictitious
entities. |
NBRC-
0037 | Paul G. Jarvis | Attorney; Law Office
of Paul G. Jarvis |
| 1408(1) |
| Very burdensome for small creditors to enforce claims in distant
forums, such as Delaware. | Section 1408(1)
should be amended to eliminate place of incorporation as a valid
bankruptcy venue. |
NBRC-
0038 | Dennis P. Rawlinson | Attorney; Miller,
Nash, Wiener, Hager & Carlsen LLP. Co-Chair of the Creditors'
Rights Subcomm. of ABA Bankr. & Insolv.
Committee |
| 1408(1) |
| Committee members have unanimously concluded that the current
venue options (place of incorporation) for fictitious entities has led
to abuse and inequities. Unfair prejudice against creditors who are
disenfranchised and burdened with extra expense to protect rights in a
far-away forum. | Supports position that venue
for fictious entities should be limited to principal place of business
and principal assets. Understands that this was the practice prior to
1978 and prevents abuses and inequities, including forum
shopping. |
NBRC-
0047 | Haynes & Boone, L.L.P. | Private
law firm |
| 1408(1) |
| Current statute has led to blatent forum-shopping by
debtor-corporations. Location is geographically inconvenient forum for
most creditors. Costly to bear expense of opposing debtor's choice of
forum. Administrative costs are higher due to distant forum. Current
statute upsets delicate balance between debtors and
creditors. | State of incorporation should be
eliminated as a potential bankruptcy venue for debtors other than
individuals. No discussion of affiliate or subsidiary
filing. |
NBRC-
0048 | Robert E. Shaw | Mitchell, Neubauer,
Shaw & Hanson, P.C. |
| 1408(1) |
| Burden of current venue
provisions falls disproportionately on smaller and rural creditors. No
mention of affiliate filings. | Eliminate
place of incorporation as a valid bankruptcy venue for bankruptcy
filings of corporations and other fictitious entities. |
NBRC-
0049 | Jack M. Zackin | Chair, Bankruptcy Law
Section NJ State Bar Ass'n |
| 1408(1) |
| Current venue provisions create
judicial inefficiency, higher administrative costs, and lead to a
perception of abuse and unfairness in the bankruptcy process by
fostering forum shopping. No mention of affiliate filing
problems. | Eliminate place of incorporation
as a valid bankruptcy venue for corporations and other fictitious
entities. |
NBRC-
0050 | Regan Whitworth | Attorney; Balyeat Law
Offices, P.C. |
| 1408(1) |
| Current venue provisions are "unjust." Arguing for
amendment in the interests of "justice" as any change in the
statute would have little effect on clients in
Montana. | Stronger reform, requiring a
bankruptcy filing where the principal assets are located. If unclear,
then where principal place of business is located. Elimination of
"domicile" and "residence" in determining venue for
a corporate petition is a sensible, modest reform. |
NBRC-
0051 | Gary E. Klausner | Attorney; Robinson,
Diamant, Brill & Klausner. Chair ABA task force on Ch. 11
practice. |
| 1408(1) |
| Current venue statute encourages forum shopping, increases costs
to the estate, and makes creditor participation
difficult. | Wholeheartedly supports proposal
to change venue to exclude place of incorporation as a venue for
fictitious entities. |
NBRC-
0052 | Francis L. Carter | Attorney; Coll,
Davidson, Carter, Smith, Salter & Barkett | Invited Participant to Small Business & Single Asset Working
Group Meeting. | 1408(1) |
| Current venue statute is the
source of "much mischief" by permitting debtors to seek a
bankrutpcy forum far away from their creditors. | Simple amendment to eliminate place of incorporation as a
bankruptcy venue for corporations and other fictitious entities would
solve this problem. |
NBRC-
0053 | Herbert Katz | Attorney; Gilchrist
& Rutter |
| 1408(1) |
| Current venue statute permits forum-shopping, is unfair to
creditors, increases the cost of bankruptcies, and has led to widespread
perception of abuse and unfairness in the system. | Statute should be amended to eliminate place of incorporation as
a valid bankruptcy venue for corporations and other fictitious
entities. |
NBRC-
0054 | Jeffrey L. Solomon | Advocacy
Vice-Chair of Gen. Practice, Solo & Small Firm ABA
Section |
| 1408(1) |
| No principled basis to retain place of incorporation or
organization as a basis for venue. Utilization of this provision has
led to unfair and unacceptable abuses of the bankruptcy
system. | Amend statute to eliminate place of
incorporation or organization as a valid bankruptcy venue. |
NBRC-
0055 | Benjamin C. Ackerly | Attorney; Hunton
& Williams |
| 1408(1) |
| Proliferation of bankruptcy cases in Bankr. Ct. in DE is an
example of how the current venue provisions are used to inconvenience
creditors. Increases cost of bankruptcy and delays resolution,
ultimately harmful to creditors. | Amend
statute to prevent a corporation or partnership from filing for
bankruptcy in the state where it is organized or
incorporated. |
NBRC-
0056 | Marsha D. Galinsky | Attorney;
Sheppard, Mullin, Richter & Hampton, LLP |
| 1408(1) |
| Current venue provision permits
forum shopping, is unfair to creditors, and increases the cost of
bankruptcies. | Eliminate place of
incorporation or organization as a bankruptcy venue for cases filed by
corporations and other fictitious entities. |
NBRC-
0057 | Bruce C. Bailey | Attorney; Chambliss
& Bahner, PLLC |
| 1408(1) |
| Why should a Philadelphia Ltd. Partnership whose sole asset is a
Wyoming shopping center be permitted to file in Phila. and require all
of the WY creditors to appear in a distant, costly forum in order to
protect their rights Result is that only the largest secured creditors
are able to protect their rights. | Eliminate
any provision for venue in a location that is simply the debtor's state
of incorporation or organization. Venue should be limited to principal
assets or place of business. |
NBRC-
0058 | Joseph H. Huston, Jr. | Attorney;
Stevens & Lee |
| 1408(1) |
| ABA's proposed change for venue provisions is based on a flawed
assumption: the burden on creditors varies from case to case and it
depends entirely on whose ox is gored. In many cases, however, quite
the contrary is true: national businesses have national creditor pools
and thus a filing in any venue but the creditor's home venue would be
"disenfranchising" and "burdensome." Especially in
the case of Delaware where a complex restructuring would require
extensive application of DE Corp. law, the whole process would benefit
from having courts and practitioners familiar with DE law involved in
the process. | To be sure, forum shopping
occurs and some hardship may result. The remedy may lie in the broad
equitable powers or an amendment less absolute than the one proposed.
To indulge the ABA's view would call into question the general venue
provisions of 1391(c) that provide for far more forum shopping against a
corporate defendant. |
NBRC-
0059 | Howard J. Beck, Jr. | Attorney; Gentry
Locke Rakes & Moore |
| 1408(1) |
| Latitude given to corporate or
partnership entities to file for bankruptcy in the place of
incorporation or organization increases potential for forum shopping and
inconveniences creditors. | Venue statute
should be amended to limit possible venues to principal place of
business or principal location of assets. |
NBRC-
0060 | Tony G. Powers | Attorney; Rogers &
Hardin |
| 1408(1) |
| Supports ABA (bankruptcy and insolvency committee of the
litigation section) effort to revise bankruptcy venue provisions.
Current statute, in the context of the nationwide availment of the
benefits of DE corp., creates the judicial equivalent of a "rotten
borough" for bankruptcy filings by corporate debtors. Imposes
undue burdens on creditors and further impairs the ability of smaller
creditors to protect their claims. | Statute
should be amended consistent with the ABA position. |
NBRC-
0061 | Dorothy H. Wimberly | Attorney; Stone,
Pigman, Walther, Wittmann & Hutchinson, LLP |
| 1408(1) |
| Harrah's Jazz, entity which
holds the contract for the casino in the state of LA, filed for
bankruptcy in DE despite the fact that majority of creditors except
bondholders were located in LA. Political pressures convinced Harrah's
to transfer its case. Such agreement is the exception rather than the
rule. | Statute should be revised to eliminate
place of incorporation or organization as a basis of venue for filing
bankruptcy cases. |
NBRC-
0062 | Rebecca R. Driggs | Attorney; Muth,
Casebolt, Germaine & Driggs |
| 1408(1) |
| Represents landlords. A
retailer's ability to file for bankruptcy in a location that has little
or nothing to do with its operations significantly increases the cost of
litigation to landlords and their ability to exercise their rights under
the bankruptcy code. While the present statute is good for lawyers in
DE, it is not good for the economy or for the majority of bankruptcy
practitioners. | The only basis for bankruptcy
venue should be place of principal business or location of principal
assets. |
NBRC-
0063 | Martha L. Passalaqua on behalf of Shapiro &
Miles | Attorney; Shapiro &
Miles |
| 1408(1) |
| Recently, firm has seen several instances of venue abuse by
debtors. Even in the case of a single-asset or multiple asset entity,
current statute permits a filing in another state. These bankruptcies
are most likely filed in bad faith. By filing in another state, these
debtors are able to forestall foreclosure even longer, while the debtor
continues collecting rent. In most cases it is nearly impossible for
the creditor to adequately protect all of its interest. General public
and the taxpayers are most affected by these unscrupulous
debtors. | Amend section 1408(1) to prevent
forum shopping. |
NBRC-
0064 | Steven B. Towbin on behalf of D'Ancona &
Pflaum | Attorney; D'Ancona &
Pflaum |
| 1408(1) |
| Recurrent situation is where a retailer with extensive operations
in Chicago is able to file in another forum based on place of
incorporation. Ch. 11 debtors in DE or NY frequently fail to pay rent or
common maintenance charges to out of state landlords pending the
assumption or rejection of their leases notwithstanding section 365(d)
with the knowledge that there is rarely enough money involved for an IL
landlord to incur the costs to litigate in a foreign forum. Even with
amounts as much as $50-$60,000 at stake, clients will forego statutory
rights instead of paying for travel and local counsel
costs. | Return to past practice under former
bankruptcy rule 116(a) that distinguished between corporate entities and
individuals for venue puposes. |
NBRC-
0065 | Henry J. Kaim | Attorney; Sheinfeld,
Maley & Kay |
| 1408(1) |
| Commencement of a case in a jurisdiction that is distant from all
aspects of a corporation's operations imposes a burden on creditors and
increases the expenses incurred by a bankruptcy estate. The fact that
the current statute permits the opportunity for forum shopping is as
obvious as it is unhealthy. The integrity of the bankruptcy system is
not well-served by the present venue statute. | Return to practice under former bankruptcy rule 116(a) which did
not permit fictitious entities to file in their place of domicile or
residence. |
NBRC-
0066 | Bruce Bennett | Attorney; Hennigan,
Mercer & Bennett |
| 1408(1) |
| Current statute is unfair and
promotes inefficiency. It is unfair to creditors and other parties in
interest that have dealt with the debtor at its principal place of
business or the location of its principal assets. When this provision
is considered together with the affiliate rule which permits related
cases to be filed in the venue selected by the first member of the
corporate group to seek relief, the potential for abuse is
enormous. | Eliminate place of incorporation
or organization as a basis of venue for cases commenced by corporations
and other fictitious entities. |
NBRC-
0067 | H. Slayton Dabney, Jr. | Attorney;
McGuire Woods Battle & Boothe, LLP |
| 1408(1) |
| Current statute permits abusive
forum shopping. | Supports amendment of
1408(1). |
NBRC-
0068 | Donald A. Workman | Attorney; Foley
& Lardner |
| 1408(1) |
| Present venue statute has led to abuse and is unfair.
Disenfranchises creditors who are merely seeking to exercise their
rights, particularly hard hit are small creditors. Leads to an overall
perception of unfairness in the bankruptcy laws. | Supports the position taken by the Bankruptcy & Insolvency
Committee of the ABA Litigation Section. Eliminate place of
incorporation or organization as a basis of venue for corporations and
other fictitious entities. |
NBRC-
0069 | Andrew W. Caine | Attorney; Pachulski
Stang Ziehl & Young |
| 1408(1) |
| Current provision permits forum
shopping, is unfair to creditors, and increases the cost of
bankruptcies. | Eliminate "place of
incorporation or organization" as a basis for bankruptcy venue in
cases filed by corporations and other fictitious entities. This
amendment will fairly limit the alternatve venues available to corporate
debtors. |
NBRC-
0070 | Gerald F. Munitz | Attorney; Winston
& Strawn |
| 1408(1) |
| Venue has become a strategic consideration in chapter 11 cases.
By permitting state of incorporation filing, debtors have greater
ability to pick a "debtor-friendly" forum to enhance their
prospects for reorganization than are other, usually smaller, debtors.
Unnecessary venue options promote the filing of ch. 11 cases because a
debtor may not be as daunted by the process in an overly favorable
forum. | Eliminate residence or domicile as
valid venues for corporate and partnership debtors. |
NBRC-
0070 | Gerald F. Munitz | Attorney; Winston
& Strawn |
| 1408(2) |
| The "affiliate rule" gives large ch. 11 debtors an even
greater advantage than the state of incorporation option. Permits a
parent to follow a debtor/affiliate into a bankruptcy forum with no
contacts other than the affiliate's pending case. | Identical considerations as those for amendment of 1408(1) favor
elimination of the "affiliate rule." Returns to the practice
under ch. X whereby a subsidiary could commence a case, or have a case
commenced against it in a forum where a corporate parent's case is
pending but not vice versa. |
NBRC-
0071 | Stephen Chrystie | Attorney; Chrystie
& Berle |
| 1408(1) |
| Current statute is patently unfair. Permits corporations to file
in a jurisdiction where it has no contacts except place of incorporation
or organization. Unfair to creditors, who are unlikely to have done
business with the debtor in the place of incorporation, and increases
the cost of bankruptcies. | Eliminate place of
incorporation or organization as a basis for bankrutpcy venue for
corporations and other fictitious entities. |
NBRC-
0079 | Philip B. Schwartz | Chair; Business
Law Section Florida Bar Association |
| 1408(1) |
| No supported reason to retain
place of incorporation/organization as a basis for bankruptcy venue of
corporations and other fictitious entities. Present use of this
provision has led to abuse and unfairness in the abnkruptcy
system. | Current venue statute should be
amended to eliminate place of incorporation/organization as a basis for
venue for corporations and other fictitious entities. |
NBRC-
0126 | Kathleen S. McElroy | Creditors'
Attorney in Florida |
| 1408(1) |
| Present statute has led to
abusive forum shopping by corporations and other fictitious
entities. | In light of these abuses, section
1408(1) should be amended to eliminate place of incorporation or
organization for fictitious entities. |
NBRC-
0127 | Brian Holman | Attorney; White &
Case |
| 1408(1) |
| Current venue statute permits disproportionate number of filings
in Delaware. No complaints concerning the Delaware bar or the Delaware
courts. Advised before the filing which judge would be assigned to the
case and the dates and times of important hearings. Understands that in
an effort to promote efficiency, sometimes the court will review the
merits of a pending motion with counsel for the parties in advance of
any hearing on the motion. Complaint is that Delaware was selected as
the venue because the Delaware bankruptcy court is notorious for
overruling any objections to a debtor's reorganization
efforts. | Bankruptcy cases should be filed
only in venues having a reasonable relationship to the reorganization
effort. Section 1408(1) should be amended. |
NBRC-
0128 | Andrew Herron | Attorney; Kelley, Drye
& Warren, LLP |
| 1408(1) |
| None stated. | Supports amendment of
the venue statute of the bankruptcy code to eliminate place of
incorporation or organization as a basis of venue. |
NBRC-
0134 | Paul S. Aronzon | Attorney; Milbank,
Tweed, Hadley & McCloy |
| 1408(1) |
| Believe that the fundamental and
historical purposes of limitations on the venue of actions in the
federal district courts -- to protect defendants from litigating in
inconvenient forums and to promote the logical distribution of cases in
the federal court system -- apply as well to the rules for the venue of
bankruptcy cases. Due Process considerations: concerned with convenience
of parties that have not chosen the forum. Proper venue in big cases
serves to further public participation in and the accountability of the
judicial process. | Proposed revision would go
a long way towards making the bankruptcy venue provisions consistent
with the recent and very substantial congressional revisions of 28
U.S.C. § 1391 which no longer refer to place of incorporation as a
potential venue for suit against a corporate defendant. Are the
contacts with the forum sufficient to establish in personam
jurisdiction. Place of incorporation is insufficient in bankruptcy to
establish minimum contacts. Eliminating a corporation's ability to
establish bankruptcy case venue in a remote forum based solely upon
place of incorporation will work no prejudice on the nation's economic
enterprises and strikes an equitable balance among the competing
commercial and public interests that are contending in any big
bankruptcy case. Encourages the NBRC to adopt a proposal to amend
1408(1) to eliminate place of incorporation to congress. |
NBRC-
0135 | N. Dwight Cary | Attorney; Murphy, Weir
& Butler |
| 1408(1) |
| Opposed to any amendment to the venue provisions under section
1408(1). Delaware courts are efficient, practical, predictable, and
even-handed. Not at all suprised that certain constituencies want to
eliminate DE as a venue option in certain large (and lucrative and
prestigious) cases. If the same efficiency and competency could be
found in other venues, I would probably be indifferent to the proposal.
No venue offers the speed and certainty of DE. Some creditors may not
prefer to see cases move quickly and efficiently, while others may only
seek to keep bankruptcy business close to home. | The fact is that large and complex cases are often filed in DE
today because the reorganization process in DE works. I hope that the
NBRC will not heed the call of those who would confine ch. 11 to the
unworkable, prolonged and procedural nightmare that has become in many
(though not all) jurisdictions. Rather than eliminate DE as a
competitor, bankruptcy courts around the country should emulate the
example set by DE and administer superior jurisprudence. In the
meantime, unless DE remains an available forum, many creditors will
suffer unnecessary losses and delays, and many innocent employees and
others will lose their jobs. |
NBRC-
0144 | David A. Burns | Attorney; Baker &
Botts |
| 1408(1) |
| Current venue provision works to the detriment of our creditors.
Difficult to deal with bankruptcy cases that arise in distant forums.
Particularly true for small creditors. Large creditors must hire local
counsel resulting in an extra layer of expense. Small creditors are
especially hard hit and cannot afford to even challenge a debtor's
choice of venue. | The code should be amended
to limit venue options for fictitious entities to principal place of
business or location of principal assets. |
NBRC-
0144 | David A. Burns | Attorney; Baker &
Botts |
| 1408(2) |
| Affiliate rule also expands (unjustifiably) the venue choices of
a large corporation and permits it to file a peition in a distant
forum. | The affiliate rule should be amended
to prohibit forum shopping by large corporate debtors who file based on
the venue of an affiliate's case. |
NBRC-
0145 | Gerald F. Munitz | Attorney; Goldberg,
Kohn, Black, Rosenbloom & Moritz | Invited
Participant - J&P working group - NBRC 0070. | 1408(1) |
| Venue Rule should be changed, but not to principal place of
business or principal assets. | Venue should
be limited to place of principal office. A rule based on a debtor's
main headquarters would also correspond to the EU insolvency statute.
Requiring a bankruptcy case to be filed in that district comports with
basic concepts of federal jurisdiction as well as commercial
expectations. |
NBRC-
0145 | Gerald F. Munitz | Attorney; Goldberg,
Kohn, Black, Rosenbloom & Moritz | Invited
Participant - J&P working group - NBRC 0070. | 1408(2) |
| Affiliate rule if left unchanged will permit the same
forum-shopping that any amendment to section 1408(1) would
change. | Affiliates should be able to follow
the parent corp.'s filing but not vice versa. A mandatory affiliate
transfer rule (as proposed by the NCBJ) would help alleviate the
multiple forum rule. |
NBRC-
0146 | Max Tucker | Attorney; Winstead,
Sechrest & Minick, PC |
| 1408(1) |
| Current venue provisions
prejudice creditors who transact business with debtor in same vicinity
as debtor's business operations. These creditors are put to great
inconvenience and expense when access to bankruptcy court becomes
necessary. If a trustee is appointed and has to have an office in the
place of domicile (§ 321) such trustee is put in the awkward
position of administering assets thousands of miles
away. | Commission should recommend that
Congress eliminate domicile and residence as a basis for venue to
corporate and partnership debtors. |
NBRC-
0147 | Bill Wallander | Attorney; Winstead,
Sechrest & Minick, PC |
| 1408(1) |
| Current venue provisions
prejudices creditors who transact business with debtor in same vicinity
as debtor's business operations. These creditors are put to great
inconvenience and expense when access to bankruptcy court becomes
necessary. If a trustee is appointed and has to have an office in the
place of domicile (section 321) such trustee is put in the awkward
position of administering assets thousands of miles
away. | Commission should recommend that
Congress eliminate domicile and residence as a basis for venue to
corporate and partnership debtors. |
NBRC-
0163 | Francis A. Monaco | Attorney; Walsh and
Monzack | Addressed Commission on issue of
Venue at meeting in San Diego. | 1408(1) |
| Permitting corporations to file in place of incorporation is not
inherently wrong, especially in the case of large national corps.
Section 1412 can handle those instances where venue is improper.
Misconceptions about 1412 motions exist: Not easy motions to make; DE
court will not refuse to transfer cases because a case has grown roots;
if creditors were so dissatisfied with the venue, why aren't more
transfer motions made. | Venue proposal will
cause more problems than it solves. Debtor's should have maximum
flexibility where to file a bankruptcy case. Venue in section 1408
should not be changed since it does not represent a problem in the first
instance. Section 1412 can solve any problems that may arise.
Commission should not succumb to pressure by certain
parties. |
NBRC-
0165 | David E. Peterson | Attorney; Lowndes,
Drosdick Doster Kantor & Reed, PA |
| 1408(1) |
| Current venue statute places an
undue burden on creditors and gives the debtor an unfair advantage over
creditors. No defensible reason to permit place of incorporation
filings when no operations exist in the state. | Amend venue provisions to eliminate place of incorporation
filings. |
NBRC-
0166 | Robert U. Sattin | Attorney; Reid &
Reige |
| 1408(1) |
| Venue will never be based solely on corporate headquarters as
long as lawyers perceive that bankruptcy judges accord different
treatment and interpretation to significant provisions of the bankruptcy
code such as third party releases, extensions of exclusivity, sales free
and clear, etc. | Suspicious of a change of
venue statute that is motivated and directed at one venue. I oppose any
efforts to change the venue provisions based on elimination of place of
incorporation. |
NBRC-
0172 | Judy A. O'Neill on behalf of Dykema Gossett,
PLLC | Attorney |
| 1408(1) |
| Current venue statute has been
abused by debtors and works to the disadvantage of creditors, who are
often located near the debtor's principal place of business or where the
debtor's principal assets are located. | Amend
the venue statute to prohibit business debtors from filing where they
are domiciled. |
NBRC-
0173 | Alan Gover | Partner - Weil, Gotshal
& Manges, LLP |
| 1408(1) |
| Opposes any amendments to the venue statute that would prohibit
venue based on place of incorporation. No justification exists for
creating classifications of corporate domicile/"citizenship"
for bankruptcy cases that are different from other federal civil cases.
The proposed changes to the venue statute overlook the fact that most
corporations' choice of state for incorporation is based primarily on
that state's taxation, regulation and corporate governance laws, and not
in the interest of maximizing venue "hospitality." Futher,
bankruptcy judges sitting in the state of incorporation are more versed
on state law issues that may arise with corporate debtors. A greatest
assets or "quantum of business activity" test would not
prevent forum shopping and would be difficult to administer.
"Anti-Delaware" aspects of the proposed venue amendment are
unjustified, as Delaware judges are as objective as judges from any
other jurisdiction. | By allowing courts to
consider on their own or by motion when changes in venue are warranted,
the current law already provides an adequate mechanism for correcting
errors, and thus does not need to be amended. |
NBRC-
0189 | Marcia L. Goldstein, on behalf of NY City Bar Assoc., Comm. on
Bankruptcy & Corp. Reorganization | Chair,
Comm. on Bankruptcy and Corp. Reorganization |
|
|
| Abolition of the "Affiliate
Rule," which establishes venue based on the jurisdiction in which
an affiliate files, would create delays and increase costs in the
prosecution of multi-debtor bankruptcy cases. | In light of the potential negative impact of abolishing the
"Affiliate Rule," the NBRC should not consider the rule's
merits without further study. |
NBRC-
0201 | D. J. Baker | Attorney |
| 28 U.S.C. § 1408 |
| Underlying assumption to the
corporate venue proposals is the mistaken belief that debtors are
flocking to file in Delaware because of the allegedly pro-debtor
leanings of the Delaware bankruptcy courts. In reality, creditors also
flock to Delaware, not because of preferential treatment or lack
thereof, but because Delaware bankruptcy courts are known to be
extraordinarily efficient at moving large cases through the sometimes
protracted Chapter 11 process. In fact, the author's experience has
been that debtors and creditors filing in Delaware each win and lose
disputed hearings with essentially the same frequency encountered in
other districts. Moreover, Delaware courts have developed a critical
mass of rulings and practice that affords all parties a high degree of
predictability, a quality valued by debtors and creditors alike.
Delaware judges also work extremely hard and treat those appearing
before them with every possible consideration. | Opposes proposed changes to the corporate venue provisions.
Assumptions that Delaware courts are "pro-debtor" are
erroneous and misleading. Instead of limiting access to Delaware
bankruptcy courts, we should be concentrating on replicating the
efficiency of those courts in other districts. |
NBRC-
0202 | Gary S. Jacobson, on behalf of the Business Bankruptcy Law
Committee of the New York County Lawyers Assoc. | Attorney | Memo on corporate venue
proposals | 28 U.S.C. §§ 1408,
1408(2) |
| Author attaches a seven-page memorandum from the Business
Bankruptcy Law Committee of the New York County Lawyers' Association on
the proposed corporate venue amendment to 28 U.S.C. § 1408. In
summary, the memorandum concludes that the current corporate venue
provisions, which allow jurisdiction based solely on state of
incorporation, invite debtor forum shopping and result in unfairness to
other parties in interest. This section is the primary source of forum
shopping, and thus § 1408(2), which provides venue based on the
pendancy of a subsudiary's case, need not also be eliminated. Any forum
shopping that is permitted under § 1408(2) is outweighed by the
efficiency and consistency that this section
provides. | Strongly supports amendment which
would eliminate venue based solely on the state of incorporation.
However, the author opposes amending the provision that allows venue
based on pendancy of a subsidiary's case. |
NBRC-
0203 | Amy M. Tonti, on behalf of the Allegheny Co. Bar Assoc.'s
Bankruptcy & Commericial Law Section | Chair, Allegheny County Bar Assoc. (ACBA), Bankruptcy and
Commerical Law Section | Summary of ACBA's
recommendations | 28 U.S.C. §
1408 |
| Corporate venue should not be based merely on state of
incorporation or an affiliate's filing. Rather, venue should be based
only on the principal place of business or the principal place of
assets. | Supports deleting state of
incorporation and the affilitate's filing as a primary basis for venue,
and urges that principal place of business and principal place of assets
be preserved as the basis for venue. Venue should be discretionary in
the district where there is a pending case under Title 11 concerning
such persons, affilates, general partner, or partnership as long as: (a)
the venue has a "reasonable" relationship to the
reorganization effort of the subsequent cases to be filed in that venue;
and (b) the intial case was not filed primarily to obtain jurisidiction
in that venue for the subsequent filings. |
NBRC-
0204 | A. Thomas DeWoskin | Attorney |
| 28 U.S.C. § 1408 |
| Permitting corporate venue based
solely on state of incorporation encourages forum shopping, and in cases
where the state of incorporation is distant from the principal place of
business, hinders efforts of local press and creditors who wish to
participate in a meaningful fashion. In short, many large corporations
register in Delaware merely as a "gimmick which enables the
[d]ebtor to avoid bad press in the local
media." | 28 U.S.C. § 1408 should be
amended to provide that a corporate debtor may not file for bankruptcy
in its state of incorporation unless this state is also its principal
place of business or principal assets. |
NBRC-
0230 | Regan Whitworth, on behalf of Balyeat Law Offices,
P.C. | Attorney |
| 1408(1) |
| Author supports the position of
the Bankruptcy and Insolvency Committee of the Litigation Section of the
American Bar Association with regard to corporate jurisdiction.
"An even stronger reform, requiring that corporate petitions be
filed where the corporation's principal assets are located (and only if
that is not easily determined, where the corporation's principal place
of business is located) would be fully
justified." | Bankruptcy Code should be
amended to eliminate "domocile" and "residence" in
determining venue for corporate bankruptcy petitions. |
NBRC-
0231 | Judith Elkin, on behalf of the Business Reorganization and
Bankruptcy Section of Haynes and Boone, L.L.P. | Section Chair; Attorney |
| 1408(1) |
| Current version of the
bankruptcy venue statute has inadvertantly led to blatant, abusive forum
shopping by debtor-companies. The statute has unfairly tipped the
balance between creditor rights and debtor interests in the debtors'
favor. Futher, no countervailing policy reasons exist for why the state
of incorporation should be an optional filing
venue. | Corporate venue statute should be
amended to delete "residency" or "domicile" as a
venue option. |
NBRC-
0232 | Jack M. Zackin and Gerald Gline, on behalf of the Bankruptcy Law
Section of the New Jersey State Bar Association | Chair - New Jersey State Bar Association Bankruptcy Law Section,
and Chair - Committee on Bankruptcy Code Reform,
respectively |
| 1408(1) |
| No principled basis exists to retain the place of incorporation
or orgaization as the basis for venue. The corporate venue provision
creates judicial ineffciency, increases the costs of administering
bankruptcy cases and fosters a perception of abuse and unfairness in the
bankruptcy system by promoting forum shopping. | Return to the provisions of Bankruptcy Rule 116(a), which
distinguished between ficticious entities and individuals in
establishing appropriate venues. This former rule did not allow
ficticious business entities to file in their place of domicile or
residence, absent other significant contacts with that
state. |
NBRC-
0233 | Robert E. Shaw, on behalf of Mitchell, Neubauer, Shaw &
Hanson, P.C. | Attorney |
| 1408(1) |
| Author supports the American Bar
Association's position on corporate venue. The current venue provisions
encourage forum shopping and do not provide a level playing
field. | Bankrupcy venue provisions shold be
amended to eliminate place of incorporation or organization as a basis
of venue for filing of bankrupcy cases by corporations and other
ficticious entities. |
NBRC-
0234 | Gary E. Klausner | Partner - Robinson,
Diamant, Brill & Klausner; Chairman - Task Force on the Economics of
Chapter 11 Practice, Bankruptcy Committee of the Business Law Section of
the ABA; past President - Financial Lawyers
Conference |
| 1408(1) |
| Existing corporate venue provision results in substantial
hardship to creditors and increases the cost of bankruptcy cases. No
reasons exist for permitting a corporation to file in their place of
incorporation where they are not otherwise conducting business or have
assets or creditors. Rather, the corporate venue provision results in
forum shopping. | Supports the proposed
amendment to § 1408(1) eliminating place of incorporation or
organization as a basis of corporate venue. |
NBRC-
0250 | Jon D. Schneider, P.C. | Attorney |
| 28 U.S.C. § 1408 |
| Current corporate venue
provisions encourage abuse and forum shopping, and are contributung to a
poor public perception of the bankruptcy process. | Supports corporate venue amendment which would restrict business
bankruptcy filings to the entity's principal place of business or
location of its principal assets. In addition, the debtor's attorney
should be required to file an affidavit as to the specific basis for
venue and the court should have an obligation to decide whether venue is
proper immediately at the commencement of the case. |
NBRC-
0251 | Francis L. Carter | Attorney |
| 28 U.S.C. § 1408(1) |
| Corporate venue statute is a
source of much mischief for debtors seeking a venue of convenience far
from their creditors. | Supports proposed
corporate venue amendment to delete place of incorporation or
organization as a basis of venue for corporate filing. |
NBRC-
0254 | Dennis P. Rawlinson | Co-Chair,
Creditors' Rights Subcommittee of the Bankruptcy & Insolvency
Committee of the Litigation Section of the ABA |
| 1408(1) |
| Current corporate venue statute
has led to abuse and inequities, and creates unfair prejudice against
creditors who are disenfranchised and burdened with extra expense to
protect their rights in an out-of-state, distant
forum. | Supports amendment to require
corporations and other ficticious entities establish venue based on
their principal place of business or principal location of
assets. |
NBRC-
0255 | Marsha D. Galinsky | Attorney |
| 1408(1) |
| Current corporate venue provision is patently unfair to
creditors, permits forum shopping, and increases the costs of
bankruptcies. | Supports amendment to
eliminate place of incorporation or orgaization as a basis of venue for
corporate bankruptcy filings. |
NBRC-
0256 | Bejamin C. Ackerly | Attorney |
| 1408(1) |
| Corporate venue statute is used by debtors to inconvenience its
creditors, who typically are situated where the assets or principal
place of business are located. The result is increased cost and delayed
resolution of cases. | Suuports amendment to
eliminate the provision permitting a corporate or partnership debtor to
file its in domicile or residence. |
NBRC-
0258 | Paul G. Jarvis | Attorney |
| 1408(1) |
| Corporate venue statute is extremely burdensome to creditors,
particularly small creditors pursuing their claims and remedies in a
court located in distant jurisdiciton. | Wholeheartedly supports amendment to eliminate place of
incorporation as a possible site of corporate venue. |
NBRC-
0259 | John A. Lapinski | Attorney |
| 1408(1) |
| Existing venue provisions permit forum shopping, are unfair to
creditors, and have lead to a wide-spread perception of abuse and
unfairness in the bankruptcy system. | 28
U.S.C. § 1408(1) should be amended to eliminate place of
incorporation or organization as a basis of venue for corporations and
other ficticious entities. |
NBRC-
0260 | Andrew R. Turner | Attorney |
| 1408(1) |
| Bankruptcy venue statute permits forum shopping. The state of
incorporation is often an inconcenient forum, escpecially for smaller
creditors, and often bears no reasonable realtion to the business and
financial affairs of the debtor. | Supports
proposed amendment to business venue statute. |
NBRC-
0266 | Bruce C. Bailey | Attorney |
| 14081(1) |
| Corporate venue provisions place undue burden on creditors.
Consequently, the only creditors able to participate in the bankruptcy
are the largest secured creditors. | Supports
amendment to eliminate any provision for venue in a location that is
simply the debtor's state of incorporation or orgnization. |
NBRC-
0267 | Joseph H. Huston, Jr. | Attorney |
| 28 U.S.C. § 1408(1) | 28 U.S.C.
§ 1391(c) | Proposed corporate venue
amendment is based on a flawed assumption, namely, that the current
statute unfairly disenfranchises or burdens creditors when, for example,
Delaware corporations with non-Delaware headquarters commence
proceedings in Delaware. On the contrary, the creditor class tends to
be national in scope and thus a filing in any venue other than a
creditor's home court would be disenfranchising and
burdensome. | Opposes proposed corporate venue
amendment. The remediy to the forum shopping that occasionally occurs
lies in the broad, equitable powers or the bankruptcy courts, or a less
absolute amendment. |
NBRC-
0281 | Jeffrey L. Solomon | Advocacy Vice
Chair of General Practice, Solo and Small Firm Section of the American
Bar Association |
| 1408(1) |
| Current corporate venue provisions cause the disenfranchisement
of smaller, regionally based creditors and parties in interest in cases
filed in areas which are geographically remote from the debtor's true
place of business. | Supports the proposed
amendment to eliminate place of incorporation or organization as a basis
for venue in cases filed by corporations and ficticious
entities. |
NBRC-
0282 | Robert B. Millner | Former Co-Chair;
Bankruptcy and Insolvency Committee, Litigation Section - American Bar
Association | Bankruptcy and Insolvency
Committee's memorandum on venue provisions | 1408(1) |
| No prinipled basis exists to retain place of
incorporation/organization as a basis for corporate venue. Moreover,
the present use of this venue provision has led to the wide-spread
perception of abuse and unfairness in the bankruptcy system. The author
attaches a memorandum on this issue by the ABA Bankruptcy and Insolvency
Committee. | Bankruptcy venue statute should
be amended to eliminate place of incorporation/organization as basis of
venue for corporations and ficticious entities. |
NBRC-
0303 | Commercial Law League of America | Commercial Law League of America (CLLA) |
|
|
| The Commerical Law League of
America believes that the following issue should be considered by the
NBRC: whether Congress should restrict the venue options for corporate
debtors by eliminating the option basde on place of incorporation
Should Congress curtail the ability of a parent corporation to follow
its subsidiary into a venue that would otherwise be
unavailable | The CLLA believes that this
issue should receive top priority, and that the Code should amended so
that venue is permitted only where the corporation has a real and
tangible connection. |
NBRC-
0305 | John E. Acuff | Attorney | Cover letter from Senator
Fred Thompson enclosing this letter from a
constituent |
|
| Author represents a small
Tennessee company who is a creditor in the chapter 11 case of a Texas
debtor. The author complains that his clients cannot participate in the
bankruptcy because they cannot afford to litigate in such a distant
venue. | Bankruptcy Code should be amended so
that creditors who cannot afford the expense of participating in
bankruptcies filed in distant venues are not altogether prevented from
partcipating in the bankruptcy. |
NBRC-
0312 | John B. Scott, Jr. | Attorney | Cover letter from Senator
Howard Heflin, enclosing this letter from his
constituent |
|
| Current provisions governing how
nationwide jurisdiction is conferred for preference claims give undue
advantage to chapter 7 trustees and chapter 11 debtors-in-possession.
Creditors often settle for a relatively modest percentage on their
preference claim in order to avoid the time and expense of having to
defend a case in somebody else's "briar
patch." | In the ongoing efforts to
achieve the proper balance between debtor and creditor, some
consideration should be given toward putting the parties on more equal
footing with regard to nationwide jurisdiction. |
NBRC-
0318 | Paul Mignini, Jr., Mary E. Wysocki and Charles M.
Tatelbaum | President-National Association of
Credit Management ("NACM"), Chair-NACM Government Affairs
Committee, and NACM Legislative and Bankruptcy Counsel,
respectively |
| 28 U.S.C. § 157 |
| NACM sought the input of all
NACM members with respect to proposed changes to the bankruptcy laws.
The NACM Government Affairs Committee, without discussing the rationales
for their suggestions, prepared the proposals
below. | NACM's Government Affairs Committee
concludes that § 157 should be amended to provide: (1) in an action
to avoid a preferential transfer where the amount of the transfer is
$3,000 or less, the adversary proceeding may be only commenced in a
Bankruptcy Court in a district where the transferee maintains a regualr
place of business. |
NBRC-
0320 | Robert M. Zinman, on behalf of the Bankruptcy
Institute | American Bankruptcy Institute
("ABI") | Numerous position papers,
memoranda and research material |
|
| Current venue provisions promote forum
shopping. | Code should be amended to place
additional restrictions on venue options because the exercise of more
discretion by the bankruptcy court will permit the proper transfer of
cases. |
NBRC-
0363 | Francis A. Monaco, Jr. | For Walsh
& Monzack, P.A. |
| 28 U.S.C. §
1408(1) |
| Allowing a corporation to file a chapter 11 petition in the
district of the state where it is incorporated is not inherently wrong,
especially given the nationwide operations of large corporations.
Geographically distant parties will always be inconvenienced by a
chapter 11 filing, no matter where it is filed. And, to the extent that
a case truly does not belong in a certain jurisdiction, 28 U.S.C. §
1412 will remedy that problem. The proposed venue amendment will
actually cause more problems than it solves because it would decrease
the debtor's flexibility to choose the most appropriate
forum. | Opposes proposed amendment to the
corporate venue provisions. |
NBRC-
0365 | Robert U. Sattin | Attorney |
| 28 U.S.C. § 1408(1) |
| Delaware courts are among the
most professional and civil bankruptcy courts in which to appear, and
Delaware judges frequently agree to changes in venue when necessary. As
such, changes in the corporate venue provisions which are aimed at the
Delaware courts are unnecessary. | Opposes any
efforts to change the venue provisions based on elimination of place of
incorporation. |
NBRC-
0379 | Janie Locke Anderson | Reporter, The
Bankruptcy Strategist |
| 28 U.S.C. §
1408(1) |
| In
this article entitled "Determining the Proper Venue for a
Bankruptcy Case," the author provides a review of issues relating
to the determination of venue. In particular, she notes that ficticious
entities do not necessarily have meaningful contacts with their
residence, while individual debtors often do, and often do not have the
resources to travel to distant venues. | In
recognition of this "common sense distinction" between
entities and individuals, the author recommends that the venue
provisions be amended to delete the reference to domocile or residence
as a basis for determining venue for ficticious entities. |
NBRC-
0447 | David R. Thompson | Judge; Chair,
Judicial Conference of the United States, Committee on the
Administration of the Bankruptcy System | Although the letter refers to a copy of the Center's report, none
was attached to this copy of the letter. A copy of the Committee's
resolution is attached. | 28 U.S.C.
§1408 |
| NBRC invited the input of the Judicial Conference Committee on
the Administration of the Bankruptcy System regarding a proposal to
amend 28 U.S.C. §1408, the bankruptcy case venue stature, to
prohibit corporate debtors from filing for relief in a district based
solely on the debtor's state of incorporation or based solely on an
earlier filing by a subsidiary in the district. The Committee requested
that the Federal Judicial Center conduct a study to provide empirical
information and analysis pertaining to the
question. | The Committee determined that the
data now available do not clearly support the need for any statutory
change. The Committee resolved to share the Center's report and to
continue to monitor scholarship and argument on this
subject. |
NBRC-
0594 | Kathleen P. March | U.S. Bankruptcy
Judge, Central District of California | Opinion written by Judge Kathleen P. March in the case of In Re
Kevin Mitchell and Kevin Mitchell vs. Fukuoka Daiei Hawks Baseball Club
and Ryuzo Setoyama dated February 26, 1997; Letter from Judge Eugene R.
Wedoff to Judge Kathleen March dated March 17, 1997 |
|
| When a lawsuit related to a bankruptcy case is pending in a
federal District Court, can that lawsuit be removed to a federal
District Court Alternatively, can a case be removed from District Court
to a Bankruptcy Court using 28 USC §1452 The Manual for
Bankruptcy Judges notes there is a split in authority on this
issue. | 28 USC §1452 should be amended
to make clear that cases cannot be removed from District Court to
District Court, or from District Court to Bankruptcy Court. |
NBRC-
0819 | Neal R. Allen | Attorney |
|
|
| Author is responding to Proposal #2 of Elizabeth Holland's
memorandum of 6/1/97. This proposal would require the trustee to bring
a preference action in the district where the creditor resided if the
debt amounted to or the value of the property transferred was less than
$10,000.00." "In the case of small preferences, where more
work is necessary and the prospects of recovery are less, the trustee
would be required to go to a distant forum to attempt to recover. For
larger preferences, he would be allowed to litigate in his 'home court'.
The result would be that small preferences against distant debtors
would rarely if ever be pursued." "In its concern to protect
distant small trade creditors (who are assumed to have limited
resources), the proposal overlooks the fact that the Cahpter 7 trustee
himself has limited resources." | Nothing
specific. |
NBRC-
1138 | Amy M. Tonti | Chair, Bankruptcy and
Commercial Law Section, The Allegheny County Bar
Association | Recommendations of the Allegheny
County Bar Association's Bankruptcy and Commercial Law Section to the
National Bankruptcy Review Commission. | 28
U.S.C. 1408 |
| Author submits the Recommendations of the Allegheny County Bar
Association's Bankruptcy and Commercial Law Section to the National
Bankruptcy Review Commission. | "The
Section recommends that the venue provisions be modified by deleting the
state of incorporation and the affiliate as a primary basis for venue
while preserving the principal place of business and principal place of
assets as the basis of venue." |
NBRC-
1163 | Richard L. Haeussler | Attorney |
|
|
| No discussion of this topic, only the statement given
below. | "I have previously indicated
that I believe that the state of incorporation provision should be
limited or deleted." |
NBRC-
1167 | David B. Stratton | Member at Large,
Deleware State Bar Association |
| 1408 |
| The Deleware State Bar
Association submits various points for consideration by the NBRC as it
prepares to consider the proposed changes to 28 U.S.C. §1408 which
would eliminate state of incorporation as a proper venue in corporate
bankruptcy filings. | "...the proposed
change in the venue statute should not be considered until academic
studies of the issue are available to the Commission; the proposed
change is not well-advised or supported by the Commission's analysis;
and the proposed change does not address directly the substantive
concerns of some of the Commissioners, which could be better addressed
if those issues themselves were studied and changes
recommended." |
NBRC-
1168 | Joseph R. Biden, Jr. | U. S. Senator,
Delaware; Ranking Member, Committee on the Judiciary, United States
Senate |
|
|
| "I am writing to express my strong opposition to the
Commision's proposal to eliminate place of incorporation as a basis for
venue in bankruptcy." | "I strongly
urge you and your colleagues to reject this ill-advised
proposal." |
NBRC-
1175 | Robert A. Colton | Chair, Business Law
Section of the Florida Bar |
|
|
|
The Section supports the Commission's recommendations
on venue. |
"...Congress should eliminate place of
incorporation as a venue option under 28 U.S.C. §1408(1) for
corporations and partnerships. Additionally, the so-called
"affiliate rule" contained in 28 U.S.C. § 1408(2) should
also be amended to preclude a debtor's affiliate(s) from filing a
petition in the same venue as the debtor's case unless that venue would
be avalid venue for the affiliated entity pursuant to 28 U.S.C. §
1408(1)." |
