II 

116TH CONGRESS 

2D SESSION S. 5032 

To amend title 28, United States Code, to modify venue requirements relating 

to bankruptcy proceedings. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 16, 2020 

Mr. CORNYN (for himself and Ms. WARREN) introduced the following bill; 

which was read twice and referred to the Committee on the Judiciary 

A BILL 

To amend title 28, United States Code, to modify venue 

requirements relating to bankruptcy proceedings. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Bankruptcy Venue Re5 form Act of 2020’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress finds that— 

8 (1) bankruptcy law provides a number of venue 

9 options for filing bankruptcy under chapter 11 of 


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1 title 11, United States Code, including, with respect 

2 to the entity filing bankruptcy— 

3 (A) any district in which the place of in4 corporation of the entity is located; 

5 (B) any district in which the principal 

6 place of business or principal assets of the enti7 ty are located; and 

8 (C) any district in which an affiliate of the 

9 entity has filed a pending case under title 11, 

10 United States Code; 

11 (2) the wide range of permissible bankruptcy 

12 venue options has led to an increase in companies 

13 filing for bankruptcy outside of their home States— 

14 the district in which the principal place of business 

15 or principal assets of the company is located; 

16 (3) the practice described in paragraph (2) is 

17 known as ‘‘forum shopping’’; 

18 (4) forum shopping has resulted in a concentra19 tion of bankruptcy cases in a limited number of dis20 tricts; 

21 (5) forum shopping— 

22 (A) prevents small businesses, employees, 

23 retirees, creditors, and other important stake24 holders from fully participating in bankruptcy 


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1 cases that have tremendous impacts on their 

2 lives, communities, and local economies; and 

3 (B) deprives district courts of the United 

4 States of the opportunity to contribute to the 

5 development of bankruptcy law in the jurisdic6 tions of those district courts; and 

7 (6) reducing forum shopping in the bankruptcy 

8 system will strengthen the integrity of, and build 

9 public confidence and ensure fairness in, the bank10 ruptcy system. 

11 (b) PURPOSE.—The purpose of this Act is to prevent 

12 the practice of forum shopping in cases filed under chapter 

13 11 of title 11, United States Code. 

14 SEC. 3. VENUE OF CASES UNDER TITLE 11. 

15 Title 28, United States Code, is amended— 

16 (1) by striking section 1408 and inserting the 

17 following: 

18 ‘‘§ 1408. Venue of cases under title 11 

19 ‘‘(a) PRINCIPAL PLACE OF BUSINESS WITH RE20 SPECT TO CERTAIN ENTITIES.— 

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2), for the purposes of this section, if an en23 tity is subject to the reporting requirements of sec24 tion 13 or 15(d) of the Securities Exchange Act of 

25 1934 (15 U.S.C. 78m, 78o(d)), the term ‘principal 


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1 place of business’, with respect to the entity, means 

2 the address of the principal executive office of the 

3 entity as stated in the last annual report filed under 

4 that Act before the commencement of a case under 

5 title 11 of which the entity is the subject. 

6 ‘‘(2) EXCEPTION.—With respect to an entity 

7 described in paragraph (1), the definition of the 

8 ‘principal place of business’ under that paragraph 

9 shall apply for purposes of this section unless an10 other address is shown to be the principal place of 

11 business of the entity by clear and convincing evi12 dence. 

13 ‘‘(b) VENUE.—Except as provided in section 1410, 

14 a case under title 11 may be commenced only in the dis15 trict court for the district— 

16 ‘‘(1) in which the domicile, residence, or prin17 cipal assets in the United States of an individual 

18 who is the subject of the case have been located— 

19 ‘‘(A) for the 180 days immediately pre20 ceding such commencement; or 

21 ‘‘(B) for a longer portion of the 180-day 

22 period immediately preceding such commence23 ment than the domicile, residence, or principal 

24 assets in the United States of the individual 

25 were located in any other district; 


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1 ‘‘(2) in which the principal place of business or 

2 principal assets in the United States of an entity, 

3 other than an individual, that is the subject of the 

4 case have been located— 

5 ‘‘(A) for the 180 days immediately pre6 ceding such commencement; or 

7 ‘‘(B) for a longer portion of the 180-day 

8 period immediately preceding such commence9 ment than the principal place of business or 

10 principal assets in the United States of the en11 tity were located in any other district; or 

12 ‘‘(3) in which there is pending a case under 

13 title 11 concerning an affiliate that directly or indi14 rectly owns, controls, or holds 50 percent or more of 

15 the outstanding voting securities of, or is the general 

16 partner of, the entity that is the subject of the later 

17 filed case, but only if the pending case was properly 

18 filed in that district in accordance with this section. 

19 ‘‘(c) LIMITATIONS.— 

20 ‘‘(1) IN GENERAL.—For the purposes of para21 graphs (2) and (3) of subsection (b), no effect shall 

22 be given to a change in the ownership or control of 

23 an entity that is the subject of the case, or of an af24 filiate of the entity, or to a transfer of the principal 

25 place of business or principal assets in the United 


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1 States of an entity that is the subject of the case, 

2 or of an affiliate of the person entity, to another dis3 trict, that takes place— 

4 ‘‘(A) within 1 year before the date on 

5 which the case is commenced; or 

6 ‘‘(B) for the purpose of establishing venue. 

7 ‘‘(2) PRINCIPAL ASSETS.— 

8 ‘‘(A) PRINCIPAL ASSETS OF AN ENTITY

9 OTHER THAN AN INDIVIDUAL.—For the pur10 poses of subsection (b)(2) and paragraph (1) of 

11 this subsection— 

12 ‘‘(i) the term ‘principal assets’ does 

13 not include cash or cash equivalents; and 

14 ‘‘(ii) any equity interest in an affiliate 

15 is located in the district in which the hold16 er of the equity interest has its principal 

17 place of business in the United States, as 

18 determined in accordance with subsection 

19 (b)(2). 

20 ‘‘(B) EQUITY INTERESTS OF INDIVID21 UALS.—For the purposes of subsection (b)(1), 

22 if the holder of any equity interest in an affil23 iate is an individual, the equity interest is lo24 cated in the district in which the domicile or 

25 residence in the United States of the holder of 


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1 the equity interest is located, as determined in 

2 accordance with subsection (b)(1). 

3 ‘‘(d) BURDEN.—On any objection to, or request to 

4 change, venue under paragraph (2) or (3) of subsection 

5 (b) of a case under title 11, the entity that commences 

6 the case shall bear the burden of establishing by clear and 

7 convincing evidence that venue is proper under this sec8 tion. 

9 ‘‘(e) OUT-OF-STATE ADMISSION FOR GOVERNMENT

10 ATTORNEYS.—The Supreme Court shall prescribe rules, 

11 in accordance with section 2075, for cases or proceedings 

12 arising under title 11, or arising in or related to cases 

13 under title 11, to allow any attorney representing a gov14 ernmental unit to be permitted to appear on behalf of the 

15 governmental unit and intervene without charge, and with16 out meeting any requirement under any local court rule 

17 relating to attorney appearances or the use of local coun18 sel, before any bankruptcy court, district court, or bank19 ruptcy appellate panel.’’; and 

20 (2) by striking section 1412 and inserting the 

21 following: 

22 ‘‘§ 1412. Change of venue 

23 ‘‘(a) IN GENERAL.—Notwithstanding that a case or 

24 proceeding under title 11, or arising in or related to a case 

25 under title 11, is filed in the correct division or district, 


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1 a district court may transfer the case or proceeding to a 

2 district court for another district or division— 

3 ‘‘(1) in the interest of justice; or 

4 ‘‘(2) for the convenience of the parties. 

5 ‘‘(b) INCORRECTLY FILED CASES OR PRO6 CEEDINGS.—If a case or proceeding under title 11, or aris7 ing in or related to a case under title 11, is filed in a 

8 division or district that is improper under section 1408(b), 

9 the district court shall— 

10 ‘‘(1) immediately dismiss the case or pro11 ceeding; or 

12 ‘‘(2) if it is in the interest of justice, imme13 diately transfer the case or proceeding to any dis14 trict court for any district or division in which the 

15 case or proceeding could have been brought. 

16 ‘‘(c) OBJECTIONS AND REQUESTS RELATING TO

17 CHANGES IN VENUE.—Not later than 14 days after the 

18 filing of an objection to, or a request to change, venue 

19 of a case or proceeding under title 11, or arising in or 

20 related to a case under title 11, the court shall enter an 

21 order granting or denying the objection or request.’’. 

Æ 


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