Monday, March 21, 2011

U.S. Senators Consider Ban On Bankruptcy "Forum Shopping"

U.S. lawmakers are considering a requirement that companies seed court protection where their primary operations are located rather than where they are incorporated, Dow Jones Daily Bankruptcy Review reported today. Sen. John Cornyn (R-Texas) is considering offering an amendment that would narrow where companies may file for bankruptcy protection. The amendment was one of 20 circulated among Senate Judiciary Committee members ahead of a business meeting last week. The amendments, only one of which--not Cornyn's--has been officially introduced, would apply to the Limiting Investor and Homeowner Loss in Foreclosure Act. Sen. Sheldon Whitehouse (D-R.I.) introduced the bill in late January to ensure that bankruptcy courts have authority to oversee mediation proceedings between home mortgage lenders and bankrupt borrowers.