“To amend title 28, United States Code, to modify venue requirements relating to bankruptcy proceedings.”
No CRS summary available for this bill.
This section sets forth congressional findings regarding venue options for chapter 11 bankruptcy cases (i.e., districts of incorporation, principal place of business or assets, or pending affiliate cases), the rise of forum shopping outside home districts, its concentration of cases in few districts, and its adverse effects on stakeholders and local courts. The section declares the purpose of the Act to prevent forum shopping in chapter 11 cases.
This section revises bankruptcy venue rules (28 U.S.C. §1408) by defining the principal place of business for entities subject to SEC reporting requirements (15 U.S.C. §§78m, 78o(d)) as the principal executive office address in the entity's last annual report filed before case commencement—unless clear and convincing evidence shows otherwise—and limiting venue to districts where an individual's or entity's domicile, residence, principal U.S. assets, or principal place of business were located for the 180 days preceding commencement (or longer portion thereof than elsewhere); a district with a pending affiliate case (if the affiliate owns/controls 50% or more of voting securities or is the general partner); or, for affiliates, equity interests located where the holder has its principal place of business or residence. It further disregards ownership/control changes or transfers of principal place of business/assets within one year before commencement or to establish venue; excludes cash/cash equivalents from principal assets; places the burden on the filing entity to prove venue proper under these rules by clear and convincing evidence; and directs the Supreme Court to prescribe rules allowing government attorneys to appear in bankruptcy courts without local counsel requirements. This section also revises change-of-venue rules (28 U.S.C. §1412) by authorizing district courts to transfer cases or proceedings in the interest of justice or for party convenience; requiring immediate dismissal or transfer (if in the interest of justice) for cases filed in improper districts; and mandating court orders on venue objections or requests within 14 days of filing.