The fate of trillions of dollars in corporate assets — as well as millions of employees, pensioners, shareholders, investors and suppliers — is concentrated in the hands of an elite group of bankruptcy professionals and judges from just two states, according to data analyzed by the Wall Street Journal. The Journal reviewed every company with assets of more than $500 million that has filed for bankruptcy protection in the past decade. Overall, more than $2.5 trillion in corporate assets have moved through U.S. bankruptcy courts in these major cases. Large chapter 11 cases are heavily concentrated. New York and Delaware, which hosted more such bankruptcy cases than the rest of the country combined, have well-established bodies of bankruptcy law and are known for setting important precedents. Rulings from the 15 judges sitting on the bench at the U.S. Bankruptcy Court in Delaware and in the Southern District of New York often reverberate across the country. Bankruptcy judges serve 14-year terms. Lawmakers are considering legislation that would force struggling companies to file for bankruptcy in a courtroom close to their principal place of business, potentially closing the loophole that has enabled most of the country’s largest bankruptcy cases to unfold in New York and Delaware. For now, major corporations are allowed access to those bankruptcy courts through affiliates, however small, located within the court’s jurisdiction.
