Cornyn, Warren Introduce Bill to Prevent ‘Forum-Shopping’ in Bankruptcy Cases

Elizabeth Warren (D-MA) and I recently introduced the Bankruptcy Venue Reform Act of 2017 to ensure corporations file for bankruptcy in districts that allow small businesses, employees, retirees, creditors, and other stakeholders to fully participate in cases that will have tremendous impacts on their lives.

Closing the loophole that allows corporations to "forum shop" for districts sympathetic to their interests will strengthen the integrity of the bankruptcy system and build public confidence. I urge my colleagues to support this bipartisan, common-sense solution to ensure equal access to the courts in bankruptcy proceedings.

“Workers, creditors, and consumers lose when corporations manipulate the system to file for bankruptcy wherever they please,” said Sen. Warren. “I’m glad to work with Senator Cornyn to 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.”


The Bankruptcy Venue Reform Act of 2017 would prevent the practice of forum shopping in Chapter 11 bankruptcy cases and ensure fairness in the bankruptcy system by:

  • Requiring individual debtors to file for bankruptcy in the district where their domicile, residence, or principal assets in the United States is located;
  • Requiring corporate debtors to file for bankruptcy in the district where their principal assets or principal place of business in the United States is located;
    • Corporate debtors would no longer be permitted to file simply on the basis of their state of incorporation.
  • Stopping debtors from filing for bankruptcy in another district simply because an affiliate of the debtor has filed there; and
  • Requiring that courts transfer or dismiss cases filed in the wrong district.

The Bankruptcy Venue Reform Act of 2017 is endorsed by the Commercial Law League, Texas Bankruptcy Bar Association, Texas Hotel & Lodging Association, Boston Bar Association, Ag & Business Legal Strategies, and Iowa Bankers Association. 


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