Senators Elizabeth Warren, a Democrat from Massachusetts, and John Cornyn, a Texas Republican, on Thursday introduced a bill to combat large, corporate entities filing for bankruptcy before judges they believe will be favorable to their interests, Reuters reported. Under the Bankruptcy Venue Reform Act of 2021, big businesses and wealthy individuals would be required to file for bankruptcy in their home states or where their largest assets are located. A version of the bill was introduced in the U.S. House of Representatives in June by Rep. Zoe Lofgren, a Democrat from California, and Rep. Ken Buck, a Republican from Colorado, and has gained some bipartisan support, with four Democrats and three Republicans signing on as co-sponsors. The venue issue has garnered attention in recent months in the chapter 11 case of OxyContin-maker Purdue Pharma, which filed for bankruptcy in White Plains, N.Y., even though it is headquartered in Stamford, Conn. “Wealthy corporations should not be able to run across the country to find a favorable court to file bankruptcy. While they manipulate the system to file for bankruptcy wherever they please, affected communities — like workers, creditors, and consumers — lose,” Sen. Warren said in a statement. The bill would “prevent big companies from cherry-picking courts that they think will rule in their favor and to crack down on this corporate abuse of our nation's bankruptcy laws,” she added. The legislation follows another bill introduced by Warren this year that aims to block litigation shields for owners or insiders of bankrupt companies.
