Two members of Congress have introduced a bipartisan bill to end what they call "corporate bankruptcy forum shopping."
Reps. Ken Buck (R-Colorado) and Zoe Lofgren (D-Calif.) introduced the Bankruptcy Venue Reform Act of 2021.
The legislation would require corporations to pursue Chapter 11 bankruptcy proceedings where their principal place of business is or where their principal assets are.
Currently, say the representatives, corporations can "venue shop" to choose a court that has issued "lenient rulings in similar cases."
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.Rep. Ken Buck (R-Colorado)
"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. Justice is best served when corporate bankruptcies are adjudicated locally, with convenient court access for employees, retirees, and local creditors and a judge who knows the affected community,” said Lofgren.
You can read the Bankruptcy Venue Reform Act of 2021 here.
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