Lofgren, Buck Reintroduce Bipartisan Legislation to End Corporate Bankruptcy Forum Shopping
WASHINGTON, DC – U.S. Representatives Zoe Lofgren (D-CA-18) and Ken Buck (R-CO-04) today reintroduced H.R. 1017, the bipartisan Bankruptcy Venue Reform Act, to ensure that the employees, small businesses, and local communities that are most impacted by a Chapter 11 bankruptcy are able to fully and fairly participate in proceedings.
"Rep. Buck and I are reintroducing this commonsense legislation because we know that it is simply unfair that corporations can game the bankruptcy system by choosing a distant court where there is a cottage industry to advantage their interests," said Rep. Lofgren. "Justice is best served when corporate bankruptcies are adjudicated locally, with convenient court access for employees, retirees, and local creditors, as well as a judge who knows the affected community."
"Under current U.S. law, corporations filing Chapter 11 bankruptcy have the ability to "venue shop" and potentially choose a court that has issued lenient rulings in similar cases. Our bill will require corporations filing Chapter 11 bankruptcy to go through those proceedings in the forum they are primarily located rather than running off to a court across the country. This will eliminate companies' ability to tilt the scale of justice and ensure the case is heard in a court familiar with all the affected stakeholders," said Rep. Buck.
The Bankruptcy Venue Reform Act simply requires that Chapter 11 bankruptcy proceedings take place where the principal place of business or principal assets of the corporation are located.
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