Delaware’s federal delegation is opposing a bi-partisan bill that would restrict a business’ venue options when filing for bankruptcy. The bill was proposed by Texas senator John Cornryn and Massachusetts Senator Elizabeth Warren.
According to Law 360, the legislation would force companies to file for bankruptcy in the state where they conduct most of their business, which targets Delaware and New York as pre-eminent venues for bigwig corporate restructuring.
The pair says their legislation will ensure corporations file for bankruptcy in districts that allow small businesses, employees, retirees, creditors, and other stakeholders to fully participate in cases that will have tremendous impacts on their lives.
Delaware’s federal delegation, along with Governor John Carney, released the following statement in response to the bill:
“Many American companies, large and small, choose to incorporate in Delaware because of the expertise and experience of our judges, attorneys, and business leaders. Denying American businesses the ability to file for bankruptcy in the courts of their choice would not only hurt Delaware’s economy but also hurt businesses of all sizes and the national economy as a whole. This is a misguided policy, and we strongly oppose it.”