[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2282 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 2282

  To amend title 28, United States Code, to modify venue requirements 
                  relating to bankruptcy proceedings.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 8, 2018

Mr. Cornyn (for himself and Ms. Warren) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
  To amend title 28, United States Code, to modify venue requirements 
                  relating to bankruptcy proceedings.

    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 ``Bankruptcy Venue Reform Act of 
2018''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds that--
            (1) bankruptcy law provides a number of venue options for 
        filing bankruptcy under chapter 11 of title 11, United States 
        Code, including place of incorporation, principal place of 
        business and assets, or where an affiliate has filed a case 
        under chapter 11;
            (2) the wide range of permissible bankruptcy venue options 
        has led to an increase in companies filing for bankruptcy 
        outside of their home States, or the district in which their 
        principal place of business or principal assets are located, a 
        practice known as forum shopping, and has resulted in a 
        concentration of bankruptcy cases in a few districts;
            (3) bankruptcy forum shopping prevents small businesses, 
        employees, retirees, creditors, and other important 
        stakeholders from fully participating in bankruptcy cases that 
        will have tremendous impacts on their lives, communities, and 
        local economies, and deprives district courts of the United 
        States of the opportunity to contribute to the development of 
        bankruptcy law in their jurisdictions; and
            (4) reducing forum shopping and manipulation in the 
        bankruptcy system will strengthen the integrity, build public 
        confidence, and ensure fairness in the bankruptcy system.
    (b) Purpose.--The purpose of this Act is to prevent the practice of 
forum shopping in cases filed under chapter 11 of title 11, United 
States Code.

SEC. 3. VENUE OF CASES UNDER TITLE 11.

    Title 28, United States Code, is amended--
            (1) by striking section 1408 and inserting the following:
``Sec. 1408. Venue of cases under title 11
    ``(a) Definition.--In this section, the term `principal place of 
business' means, with respect to a person or entity that is subject to 
the reporting requirements of section 13 or 15(d) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)), the address of the 
principal executive office of the person or entity as stated in the 
last annual report filed under that Act prior to the commencement of a 
case under title 11 by the person or entity, unless another address is 
shown to be the principal place of business by clear and convincing 
evidence.
    ``(b) Venue.--Except as provided in section 1410, a case under 
title 11 may be commenced only in the district court for the district--
            ``(1) in which the domicile, residence, or principal assets 
        in the United States of an individual who is the subject of the 
        case have been located for the 180 days immediately preceding 
        such commencement, or for a longer portion of the 180-day 
        period than the domicile, residence, or principal assets in the 
        United States of the individual were located in any other 
        district;
            ``(2) in which the principal assets or principal place of 
        business in the United States of a person or entity, other than 
        an individual, that is the subject of the case have been 
        located for the 180 days immediately preceding the 
        commencement, or for a longer portion of the 180-day period 
        than the principal place of business or principal assets in the 
        United States of the person or entity were located in any other 
        district; or
            ``(3) in which there is already pending a case under title 
        11 concerning an affiliate that directly or indirectly owns, 
        controls, is the general partner, or holds 50 percent or more 
        of the outstanding voting securities, of the person or entity 
        that is the subject of the later filed case if the pending case 
        was properly filed in that district under this section.
    ``(c) Limitations.--
            ``(1) In general.--For the purposes of paragraphs (2) and 
        (3) of subsection (b), no effect shall be given to a change in 
        the ownership or control of a person or entity that is the 
        subject of the case or its affiliate, or to a transfer of the 
        principal assets or principal place of business of a person or 
        entity that is the subject of the case or its affiliate to 
        another district, that takes place--
                    ``(A) within 1 year before the date on which the 
                case is commenced; or
                    ``(B) for the purpose of establishing venue.
            ``(2) Principal assets.--For the purposes of subsection 
        (b)(2) and paragraph (1) of this subsection, principal assets 
        do not include cash or cash equivalents.
    ``(d) Burden.--The person or entity that commences a case under 
title 11 shall bear the burden of establishing by clear and convincing 
evidence that venue is proper under this section.''; and
            (2) by striking section 1412 and inserting the following:
``Sec. 1412. Change of venue
    ``Notwithstanding that a case or proceeding under title 11 is filed 
in the correct division or district, a district court may nevertheless 
transfer a case or proceeding under title 11 to a district court for 
another district or division, in the interest of justice or for the 
convenience of the parties. If a case or proceeding under title 11 is 
filed in the wrong division or district, the district court shall 
transfer, dismiss the case or proceeding, or, if it be in the interest 
of justice, transfer the case or proceeding under title 11 to any 
district or division in which it could have been brought. The court 
shall enter an order on any objection to or request to change venue of 
a case or proceeding under title 11 not later than 14 days after the 
filing of such objection or request.''.
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