[Congressional Record Volume 164, Number 4 (Monday, January 8, 2018)]
[Senate]
[Page S68]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. CORNYN (for himself and Ms. Warren):
S. 2282. A bill to amend title 28, United States Code, to modify
venue requirements relating to bankruptcy proceedings; to the Committee
on the Judiciary.
Mr. CORNYN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 2282
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 State
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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