Important Consideration Regarding Pending Bankruptcy Venue Reform Legislation

Finance and restructuring partners Scott Gautier, Richard Bernard and Vince Slusher coauthored an article for the New York Law Journal titled “Important Consideration Regarding Pending Bankruptcy Venue Reform Legislation.”

The authors discuss how the Venue Acts, corporate bankruptcy venue reform bills pending in committees of both the House (HR4421) and Senate (S5032), may impact corporate debtors. If the pending legislations are adopted and venue choices are eliminated, corporate debtors in some jurisdictions may find themselves without a viable chapter 11 solution.

The article details how Circuit Court splits are important to venue selection decisions and can control whether a corporate debtor will have the ability to (i) assume critical contracts by which the corporation licenses key intellectual property; (ii) effectively conduct a sale process for the business as a going concern; or (iii) structure a settlement with significant constituents that are willing to help fund the corporation’s reorganization.