The National Association of Attorneys General (NAAG) sent a letter yesterday to Congress signed by 43 attorneys general in support of the Bankruptcy Venue Reform Act of 2021. H.R. 4193 was introduced by Rep. Zoe Lofgren (D-Calif.) on June 28 and its companion in the Senate, S. 2827, on Sept. 23 by Sen. John Cornyn (R-Texas) aiming to end “forum shopping” and prevent corporations from choosing to file for bankruptcy in whichever district is believed to be more favorable. In the letter, the attorneys general contend that passage of the legislation will:
· Reduce forum shopping in the bankruptcy system.
· Strengthen the integrity of, and build public confidence and ensure fairness in, the bankruptcy system.
· Help consumers and other parties to be represented in court without undue burden.
· Level the playing field for state attorneys general to guard their states’ financial interests and enforce consumer protection laws.
“In short, by ensuring that debtors whose operations have created adverse impacts on their neighbors are called to account in proximity to those same neighbors, H.R. 4193 and S. 2827 will greatly limit forum shopping while helping consumers and many other parties, large and small alike — including creditors, workers, retirees, shareholders, and small business vendors — to represent themselves without undue burden,” according to the letter. Read the letter here.
