USA Discounters Ltd., a retailer that has been accused of scamming U.S. service members, is defending its decision to file for chapter 11 in Delaware despite having roots elsewhere, the Wall Street Journal Bankruptcy Beat blog reported yesterday. Bankruptcy Judge Christopher Sontchi ordered the retailer to appear at a hearing on Friday to defend its filing in the Wilmington, Del., court over “some other appropriate venue.” USA Discounters has its headquarters in Norfolk, Va., and faces litigation related to its business practices in Colorado, two possible venues that Judge Sontchi’s order cited. But the company says that there is no dispute that its chapter 11 filing, made last month, complies with bankruptcy laws, as two of the three entities that filed were incorporated in Delaware.
