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News Room

Government Working Group Proposal #21
Chapter 9: Elimination of Section 921(b)

Background

Section 921(b) of title 11 provides that "The chief judge of the court of appeals for the circuit embracing the district in which the case is commenced shall designate the bankruptcy judge to conduct the case. " 11 U.S.C. § 921(b) (1996).

Proposal

Section 921(b) should be deleted. There is no longer any concern that a bankruptcy judge who was ill-equipped to handle a chapter 9 case would be assigned one.

Reasons for the Change

Judicial selection of a chapter 9 judge was first enacted in the 1976 amendments to chapter IX that arose out of New York City’s fiscal crisis. Legislators at that time were concerned that a bankruptcy judge who was ill-equipped to handle a sophisticated chapter 9 case (namely, New York City) might be assigned to preside over one. In order to further remove the decision from being influenced by local politics, section 921(b) empowered the chief judge of the relevant circuit to designate the judge who would hear a chapter 9 case. Concerns over the ability and sophistication of bankruptcy judges to handle a chapter 9 case is no longer well-founded. As a result, this provisions of the statute should be eliminated. Chapter 9 cases should be assigned according to the local rules and practices governing the assignment of other bankruptcy cases. The flexibility of the chief judge to assign any judge in the circuit to preside over a chapter 9 case is not necessary.

Competing Considerations

There do not appear to be any competing considerations.


 

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