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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