S To amend title 28, United States Code, to modify venue requirements relating to bankruptcy proceedings. IN THE SENATE OF THE UNITED STATES
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1 II 115TH CONGRESS D SESSION S. 8 To amend title 8, United States Code, to modify venue requirements relating to bankruptcy proceedings. IN THE SENATE OF THE UNITED STATES JANUARY 8, 018 Mr. CORNYN (for himself and Ms. WARREN) introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To amend title 8, United States Code, to modify venue requirements relating to bankruptcy proceedings Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the Bankruptcy Venue Reform Act of 018. SEC.. FINDINGS AND PURPOSE. (a) FINDINGS. Congress finds that (1) bankruptcy law provides a number of venue daltland on DSKBBV9HBPROD with BILLS 9 options for filing bankruptcy under chapter 11 of 10 title 11, United States Code, including place of in- VerDate Sep :5 Jan 08, 018 Jkt PO Frm Fmt 665 Sfmt 601 E:\BILLS\S8.IS S8
2 daltland on DSKBBV9HBPROD with BILLS 1 corporation, principal place of business and assets, or where an affiliate has filed a case under chapter 11; 4 () the wide range of permissible bankruptcy 5 venue options has led to an increase in companies 6 filing for bankruptcy outside of their home States, 7 or the district in which their principal place of busi- 8 ness or principal assets are located, a practice 9 known as forum shopping, and has resulted in a 10 concentration of bankruptcy cases in a few districts; 11 () bankruptcy forum shopping prevents small 1 businesses, employees, retirees, creditors, and other 1 important stakeholders from fully participating in 14 bankruptcy cases that will have tremendous impacts 15 on their lives, communities, and local economies, and 16 deprives district courts of the United States of the 17 opportunity to contribute to the development of 18 bankruptcy law in their jurisdictions; and 19 (4) reducing forum shopping and manipulation 0 in the bankruptcy system will strengthen the integ- 1 rity, build public confidence, and ensure fairness in the bankruptcy system. (b) PURPOSE. The purpose of this Act is to prevent 4 the practice of forum shopping in cases filed under chapter 5 11 of title 11, United States Code. VerDate Sep :5 Jan 08, 018 Jkt PO Frm 0000 Fmt 665 Sfmt 601 E:\BILLS\S8.IS S8
3 daltland on DSKBBV9HBPROD with BILLS SEC.. VENUE OF CASES UNDER TITLE 11. VerDate Sep :5 Jan 08, 018 Jkt PO Frm 0000 Fmt 665 Sfmt 601 E:\BILLS\S8.IS S8 Title 8, United States Code, is amended (1) by striking section 1408 and inserting the following: Venue of cases under title 11 (a) DEFINITION. In this section, the term principal place of business means, with respect to a person or entity that is subject to the reporting requirements of section 1 or 15(d) of the Securities Exchange Act of 194 (15 U.S.C. 78m, 78o(d)), the address of the principal executive office of the person or entity as stated in the last annual report filed under that Act prior to the commencement of a case under title 11 by the person or entity, unless another address is shown to be the principal place of business by clear and convincing evidence. (b) VENUE. Except as provided in section 1410, a case under title 11 may be commenced only in the district court for the district (1) in which the domicile, residence, or principal assets in the United States of an individual who is the subject of the case have been located for the 180 days immediately preceding such commencement, or for a longer portion of the 180-day period than the domicile, residence, or principal assets in the United States of the individual were located in any other district;
4 daltland on DSKBBV9HBPROD with BILLS 4 1 () in which the principal assets or principal place of business in the United States of a person or entity, other than an individual, that is the sub- 4 ject of the case have been located for the 180 days 5 immediately preceding the commencement, or for a 6 longer portion of the 180-day period than the prin- 7 cipal place of business or principal assets in the 8 United States of the person or entity were located 9 in any other district; or 10 () in which there is already pending a case 11 under title 11 concerning an affiliate that directly or 1 indirectly owns, controls, is the general partner, or 1 holds 50 percent or more of the outstanding voting 14 securities, of the person or entity that is the subject 15 of the later filed case if the pending case was prop- 16 erly filed in that district under this section (c) LIMITATIONS. (1) IN GENERAL. For the purposes of paragraphs () and () of subsection (b), no effect shall be given to a change in the ownership or control of a person or entity that is the subject of the case or its affiliate, or to a transfer of the principal assets or principal place of business of a person or entity that is the subject of the case or its affiliate to another district, that takes place VerDate Sep :5 Jan 08, 018 Jkt PO Frm Fmt 665 Sfmt 601 E:\BILLS\S8.IS S8
5 daltland on DSKBBV9HBPROD with BILLS 5 1 (A) within 1 year before the date on which the case is commenced; or (B) for the purpose of establishing venue. 4 () PRINCIPAL ASSETS. For the purposes of 5 subsection (b)() and paragraph (1) of this sub- 6 section, principal assets do not include cash or cash 7 equivalents. 8 (d) BURDEN. The person or entity that com- 9 mences a case under title 11 shall bear the burden of es- 10 tablishing by clear and convincing evidence that venue is 11 proper under this section. ; and 1 () by striking section 141 and inserting the 1 following: Change of venue 15 Notwithstanding that a case or proceeding under 16 title 11 is filed in the correct division or district, a district 17 court may nevertheless transfer a case or proceeding 18 under title 11 to a district court for another district or 19 division, in the interest of justice or for the convenience 0 of the parties. If a case or proceeding under title 11 is 1 filed in the wrong division or district, the district court shall transfer, dismiss the case or proceeding, or, if it be in the interest of justice, transfer the case or proceeding 4 under title 11 to any district or division in which it could 5 have been brought. The court shall enter an order on any VerDate Sep :5 Jan 08, 018 Jkt PO Frm Fmt 665 Sfmt 601 E:\BILLS\S8.IS S8
6 1 6 objection to or request to change venue of a case or proceeding under title 11 not later than 14 days after the filing of such objection or request.. Æ daltland on DSKBBV9HBPROD with BILLS VerDate Sep :5 Jan 08, 018 Jkt PO Frm Fmt 665 Sfmt 601 E:\BILLS\S8.IS S8
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