Will Bankruptcy Legislation Oust the Bankruptcy Courts of Delaware and New York
The bankruptcy courts of Delaware and New York dominate major chapter 11 cases, to the great delight of lawyers in those areas. But the work of the courts has been oft-criticized as far too pro-debtor, with the Delaware courts receiving especially blunt criticism. See Professor Lynn LoPucki’s 2005 book: Courting Failure: How Competition for Big Cases is Corrupting the Bankruptcy Courts. It’s a great telling of a depressing story, with large amounts of objective data to prove the conclusion set out in the book’s title.
Now, the March 2012 issue of The ABA Journal includes an article describing some of the perceived flaws of the courts, and reporting on new efforts to undo the prior legislation that allowed New York and Delaware to take over. Will the new efforts pass? Stay tuned.