[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 314 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 314

To protect consumers, creditors, workers, pensioners, shareholders, and 
small businesses, by reforming the rules governing venue in bankruptcy 
          cases to combat forum shopping by corporate debtors.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 8, 2005

  Mr. Cornyn introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
To protect consumers, creditors, workers, pensioners, shareholders, and 
small businesses, by reforming the rules governing venue in bankruptcy 
          cases to combat forum shopping by corporate debtors.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fairness in Bankruptcy Litigation 
Act of 2005''.

SEC. 2. VENUE IN BANKRUPTCY CASES.

    Section 1408 of title 28, United States Code, is amended--
            (1) by inserting ``(a)'' before ``Except'';
            (2) in paragraph (1), by striking ``or'' at the end; and
            (3) by striking paragraph (2) and inserting the following:
            ``(2) in which a case under title 11 concerning the 
        controlling corporation is pending, if--
                    ``(A) the debtor is controlled by another 
                corporation;
                    ``(B) within the 730 days before the date of the 
                debtor's filing under title 11, the financial 
                statements of the debtor have been consolidated with 
                those of the controlling corporation in 1 or more 
                reports filed under section 13 or 15(d) of the 
                Securities Exchange Act of 1934; and
                    ``(C) the controlling corporation is a debtor in a 
                proceeding under title 11; or
            ``(3) in which a case under title 11 concerning the 
        controlling corporation is pending, if--
                    ``(A) the debtor is a corporation other than a 
                corporation described in paragraph (2);
                    ``(B) the debtor has been controlled by another 
                corporation for not less than 365 days before the date 
                of the filing of the debtor's petition under title 11; 
                and
                    ``(C) the controlling corporation is a debtor in a 
                proceeding under title 11.
    ``(b) For purposes of subsection (a)--
            ``(1) if the debtor is a corporation, the domicile and 
        residence of the debtor are located where the debtor's 
        principal place of business is located; and
            ``(2) the term `control' has the meaning given that term in 
        section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841).''.

SEC. 3. CURE OR WAIVER OF DEFECTS.

    Section 1406(c) of title 28, United States Code, is amended to read 
as follows:
    ``(c) As used in this section--
            ``(1) the term `district court'--
                    ``(A) includes the District Court of Guam, the 
                District Court of the Northern Mariana Islands, and the 
                District Court of the Virgin Islands; and
                    ``(B) with regard to cases pending before a 
                bankruptcy court, includes a bankruptcy court; and
            ``(2) the term `district' includes the territorial 
        jurisdiction of each district court.''.
                                 <all>