NOV 10, 2021
(COLUMBIA, S.C.) - Attorney General Alan Wilson has co-sponsored a letter to Congress signed by 43 attorneys general in support of the Bankruptcy Venue Reform Act of 2021. The bipartisan legislation would end “forum shopping” and prevent corporations from choosing to file for bankruptcy in whichever district is believed to be more favorable.
Currently, incorporations may file bankruptcy in any district in which they are incorporated, have their principal place of business or assets, or in any district where an affiliate – no matter how small – has been created or located. This leaves corporations with a wide choice of possible venues, which can be manipulated to their own advantage.
“This bill is about fairness and making sure large corporations can’t game the system to try to get rulings that are the most favorable for them,” Attorney General Wilson said. “With the current system, it also means that, as attorneys general who protect our citizens, cases may end up being tried in other states, which means we have to spend taxpayers’ money on travel.”
If passed, the Bankruptcy Venue Reform Act of 2021 will:
In the letter, the attorneys general contend that passage of the legislation will:
In addition to South Carolina, the letter was led by Connecticut Attorney General William Tong, Maryland Attorney General Brian Frosh, Ohio Attorney General Dave Yost, and Texas Attorney General Ken Paxton, and signed by the attorneys general of Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.
You can read the letter here.
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