Media contact: Lynsey Mukomel 517-599-2746
Public inquiries: 517-335-7622
November 12, 2021
LANSING - Michigan Attorney General Dana Nessel 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 legislation would close a loophole that allows corporations to strategize a bankruptcy filing," Nessel said. "These proposed bills already have bipartisan support, and I join my colleagues in urging Congress to get them across the finish line."
If passed, the Bankruptcy Venue Reform Act of 2021 will:
In the letter, the attorneys general contend that passage of the legislation will:
The letter, which can be read online, was led by Connecticut Attorney General William Tong, Maryland Attorney General Brian Frosh, Ohio Attorney General Dave Yost, and Texas Attorney General Ken Paxton.
Joining Attorney General Nessel in signing are the attorneys general of Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Nevada, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.