Making the case for bankruptcy filing venue changes

MGLaw attorney Griffin Dunham says legislation to tighten bankruptcy filing venue rules [2] — Memphis Congressman Steve Cohen is co-sponsoring the bill — should be well received. The proposal will require companies to file where they are based or do most of their business.

The bill is aimed at preventing debtors from using a friendly forum where they have no real presence to make creditors’ lives more difficult. This makes sense - the most affected districts should hear the case. This also seems fair to creditors because presumably it would cut down on the significant transaction costs that would be incurred to fight in $600/hour legal markets like Delaware and New York.