- Insolvency Proceedings •
- Bankruptcy Proceedings •
- Cross-Border Insolvencies •
- Chapter 11 •
- Chapter 15; Scheme of Arrangement
This Article proposes reforms to bankruptcy law’s venue rules. These reforms would expand venue choice, reduce opportunistic venue shopping, and account for the rise of global forum shopping. To date, the leading proposals to reform venue selection rules for bankruptcy cases have ignored simpler alternatives that can reduce opportunistic misbehavior while preserving beneficial choice.
To remedy this, we suggest alternative reforms that account for the availability of foreign forums, reduce opportunities for harmful venue shopping, and preserve the benefits of choice. Rather than restrict a debtor’s ability to select a domestic venue, reforms should (1) allow firms to make an ex ante commitment to a procedure for choosing a bankruptcy district, and (2) resolve inconsistencies in substantive bankruptcy law across venues and forums. These reforms would retain beneficial choice while reducing opportunistic shopping of both domestic venues and foreign forums. The precommitment mechanism we propose is preferable to existing proposals even for parties that cannot shop globally, but the availability of foreign forums makes the case even stronger.