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Bipartisan Group of 42 AGs Supports Congress’ Effort to Stop Companies from Forum-Shopping When Filing for Bankruptcy

 

  • A bipartisan coalition of 42 AGs led by Maryland AG Brian Frosh, Ohio AG David Yost, Texas AG Ken Paxton, and Washington AG Bob Ferguson, sent a letter to Congress in support of the Bankruptcy Venue Reform Act of 2019, H.R. 4421.
  • R. 4421 is a bipartisan bill that proponents assert would prevent corporations from “forum-shopping” in bankruptcy proceedings by requiring businesses to file bankruptcy only in jurisdictions in which either their principal assets or principal place of business are located, among other things.
  • In the letter, the AGs argue that the bill would strengthen the integrity and fairness of the bankruptcy system, reduce undue burdens on consumers participating in bankruptcy proceedings, and level the playing field for AGs to assert their states’ interests and enforce consumer protection laws. Because of the number of signatories, the letter articulates an official position adopted by the National Association of Attorneys General (“NAAG”) and was sent on NAAG letterhead.