Top bankruptcy scholars are pushing federal lawmakers to pass a rule that would make major corporations file for bankruptcy closer to their headquarters, saying remote restructurings “defy common sense and may leave local citizens suspicious of the motives behind it,” WSJ Bankruptcy Pro reported. Nearly two dozen law professors sent a letter to Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and ranking member Dianne Feinstein (D-Calif.) earlier this week in support of a proposal to limit where a company can file for chapter 11 protection. In the five-page letter, the professors said a company’s “home base is the right place for [all stakeholders] to gather to resolve that crisis as fairly and successfully as possible.” The bankruptcy experts noted the bankruptcy process encompasses more than purely financial considerations. Proponents of venue reform say monitoring a case from abroad can be difficult for stakeholders. Lawyers in Wilmington, Del., and New York — where many big cases are filed — can be expensive to hire and the “local legal community in the distant venue may be close knit and frugal in the information it shares,” the professors said. The letter intensifies the debate over the Jan. 8 bill from Sens. John Cornyn (R-Texas) and Elizabeth Warren (D-Mass.) No other lawmakers have signed onto the bill. Last month, the New York City Bar Association voiced opposition to the rule, calling it a “myth” that workers, vendors and other groups can’t fully participate in remote bankruptcy cases. Technological advancements such as telephonic appearances at court hearings and online court documents have reduced the hurdles for remote participation.
