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Jurisdiction & Procedure Proposal Number 10:
Venue for Corporate Affiliates

The affiliate rule contained in 28 U.S.C. §1408(2) should be amended to prohibit a filing in an improper venue unless such debtor s corporate parent is a debtor in a case under the Bankruptcy Code in that forum. Section 1408(2) should be amended as follows:

(2) in which there is pending a case under title 11 concerning such person s affiliate, as defined in section 101(2)(A) of title 11, general partner, partnership, or a partnership controlled by the same general partner.

Affiliate rule problems in the case of partnerships has not been widely acknowledged. As a result, the Proposal has been narrowly tailored to address corporate entities only. The court's discretionary power to transfer venue in the interest of justice and for the convenience of the parties should not be restricted.

Date of Adoption: February 21, 1997

 

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