COLUMBUS, Ohio (WKBN) – Ohio’s Attorney General is calling for a law to make it harder for corporations to take advantage of the system during bankruptcy filings.
Attorney General Dave Yost joined a coalition of more than 40 attorneys general who are in support of the Bankruptcy Venue Reform Act of 2019. It would prevent a corporation from filing for bankruptcy in a district that it believes would be more favorable to it. That practice known as “forum shopping” imposes a burden on states and other creditors who may have to travel and incur significant expenses to pursue their claims, according to Yost’s office.
“When corporations exploit loopholes, it’s the consumer who bears the brunt of the costs,” Yost said. “The current set of rules is in desperate need of an update and we urge Congress to make those necessary changes.”
If passed, the Bankruptcy Venue Reform Act of 2019 would:
- Limit where businesses may file bankruptcy by ensuring that they will do so in a jurisdiction in which their “principal assets” or their “principal place of business” are located; and
- Require rules to be prescribed to allow all governmental attorneys to appear without charge and without being required to associate with local counsel.