Mark Felger quoted in Turnarounds & Workouts

Thursday, December 1, 2011

Mark Felger was quoted in the Turnarounds & Workouts article entitled "New Venue Legislation Returns: House Seeks to Remove State of Incorporation as Venue" regarding a legislative bill which seeks to rid state of incorporation from the venues of a corporate bankruptcy filing.

“We’ve seen absolutely no empirical data to support the notion that there are abuses or, as one commentator claimed, ‘corruption,’ in how venue decisions are made and courts deal with cases," said Mark Felger.

“Primary place of business and location of assets are undefined,” he said. “As a result, the bill is rife with the opportunity for litigation because people may have different opinions about what these terms mean.”

“Supporters claim the bill will allow employees and small creditors to have greater access to bankruptcy cases because they will be closer to a courthouse,” he said. “I think that is fallacious on a number of levels. We live in a world of electronic filing, so any creditor or employee who wants to follow a bankruptcy case can do so through a computer. They can access dockets and pleadings, and even file pleadings, electronically. And if they want to appear in a case, the courts are receptive to telephonic participation. As such, if one has a computer and a telephone, it is equivalent to living next door to the courthouse.”

“Not only has the current venue provision been part of the bankruptcy law in this country for over 100 years, but it is consistent with other federal statutory schemes and the UCC, which was amended a few years ago to require secured parties to perfect their security interests in the debtor’s state of incorporation – so the venue rules are consistent with UCC filing rules,” said Felger.

“Some folks seem to think that since the legislation is being introduced by the chair and ranking member of the House Judiciary Committee, it may get more traction in the House,” he said. “This ought not be the case, however, because the same faulty logic that spawned the bill last time around holds true today.”

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