Restructuring & Finance Litigation

Herrick Restructuring & Finance Litigation Department partner, Christopher W. Carty and associate Hunter G. Waters, authored an article for the American Bankruptcy Institute Journal discussing a recent decision by the U.S. Bankruptcy Court for the District of New Jersey that highlighted how establishing venue and determining where to file a Chapter 11 case can be an important and strategic decision for debtors.

In the article, Chris and Hunter noted that "bankruptcy venue is governed by 28 U.S.C. § 1408: an expansive statute that provides debtors several ways to establish venue, including through the location of a debtor’s 'principal assets.' This liberal statute, however, often lends itself to debtors who look for creative ways to establish venue in a forum thought to be favorable to their interests."

The article explains that "the flexibility the statute provides to a debtor – particularly in cases involving multiple affiliated debtors – to choose its preferred venue was highlighted in a recent decision by the Bankruptcy Court for the District of New Jersey in In re Multi-Color Corp."

The Court's decision stated that the "debtors appropriately established venue in the District of New Jersey based solely on two New Jersey-based bank accounts opened and funded in the immediate lead up to the bankruptcy filing."

Read the full article in the American Bankruptcy Institute Journal here. Access may require a subscription.