Peter Califano, a partner at Cooper, White & Cooper and Chair of the Commercial Law League of America‘s (“CLLA”) Bankruptcy Section, testified on September 8, 2011 in Washington, D.C. before the Subcommittee on Courts, Commercial and Administrative Law of the House Judiciary Committee. Mr. Califano presented the CLLA’s position supporting H.R. 2533, the “Chapter 11 Bankruptcy Venue Reform Act of 2011″ recently introduced by Representatives Lamar Smith and John Conyers, Jr. He testified that the bill “attempts to rebalance the interests of all parties in bankruptcy by making sure that the bankruptcy reorganization process remains within the regions and communities that have the most significant vested interest in the outcome.”
Mr. Califano pointed out that when a business fails, the local bankruptcy courts are the best place to oversee the bankruptcy process. If the corporate debtor’s bankruptcy case is filed in a “remote” court, those persons with important stakes and information could be cut off or their input minimized. He highlighted several bankruptcy cases showing how local employees, creditors and retirees helped or were hampered by the location of the bankruptcy cases. It was also noted that other courts around the country do have the skill and capability to handle mega-cases citing, for example, the Pacific Gas & Electric Co., bankruptcy which was filed in the Northern District of California, with approximately $35 billion in assets and 20,000 employees.
To read Mr. Califano’s Written Statement, as well as the statements of the other speakers, or to view a recording of the hearing, go to: http://judiciary.house.gov/hearings/hear_09082011.html.