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.

via American Bankruptcy Institute | Members Only Area.

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