Reps. Lofgren and Sensenbrenner Introduce Legislation to End Corporate Bankruptcy Forum Shopping
Washington, DC – U.S. Representatives Zoe Lofgren (D-CA) and Jim Sensenbrenner (R- WI) today introduced the bipartisan Bankruptcy Venue Reform Act of 2019 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.
“The outcome of a Chapter 11 bankruptcy proceeding can have a profound impact on local communities,” said Representative Lofgren. “Justice requires that community stakeholders be able to fully participate and that these proceedings be adjudicated by someone from and knowledgeable of the community, rather than allowing corporations to choose a court where an entire cottage industry has been built around favorable decisions that benefit corporate interests above all else.”
Representative Sensenbrenner: “Our corporate bankruptcy system has developed into a cottage industry where the better majority of proceedings take place in two states—often far away from the people that will be impacted by the decisions. This bipartisan bill makes key changes to the bankruptcy code that will allow employees and other community stakeholders to participate in the process more fully.”
The Bankruptcy Venue Reform Act of 2019 will accomplish this by requiring that Chapter 11 bankruptcy proceedings take place where the principal place of business or principal assets of the corporation are located, where the effects of the bankruptcy are the greatest.