- Cases Under Title 11
- Proceedings Arising Under Title 11 Or Arising In Or Related To Title 11 Cases
- Change of Venue
- Forum Selection Clauses
1. Cases Under Title 11.
Under 28 U.S.C. § 1408:
a. District in which the domicile, residence, principal place of business in the United States, or principal assets in the United States of the debtor have been located for the 180 days preceding the filing, or for a longer portion of such 180-day period. See Broady v. Harvey (In re Broady), 247 B.R. 470 (B.A.P. 8th Cir. 2000); In re Fishman, 205 B.R. 147 (Bankr. E.D. Ark. 1997); or
b. District in which a case under title 11 concerning such debtor's affiliate, general partner, or partnership is pending.
2. Proceedings Arising Under Title 11 Or Arising In Or Related To Title 11 Cases.
a. Except as provided in § 1409(b) and (d), arising under, arising in, and related to proceedings may be commenced in the district in which the case is pending. 28 U.S.C. § 1409(a).
b. Exceptions --
(1) Action to recover judgment or property worth less than $1,000, or consumer debt of less than $5,000, may be brought only in district where defendant resides. 28 U.S.C. § 1409(b).
(2) Action involving postpetition operation of the debtor's business is governed by nonbankruptcy venue provisions. 28 U.S.C. § 1409(d).
3. Change of Venue.
Case or proceeding may be transferred "in the interest of justice or for the convenience of the parties." 28 U.S.C. § 1412; see Puerto Rico v. Commonwealth Oil Ref. Co. (In re Commonwealth Oil Ref. Co.), 596 F.2d 1239, 1247 (5th Cir. 1979) (court must consider, inter alia, proximity of creditors, debtor, witnesses, books, assets); EDP Med. Computer Sys., Inc. v. United States (In re EDP Med. Computer Sys., Inc.), 178 B.R. 57 (M.D. Pa. 1995) (U.S. motion for change of venue granted where debtor only filed petition in district because debtor's president was incarcerated there); Lone Star Indus., Inc. v. Rankin County Econ. Dev. Dist. (In re N.Y. Trap Rock Corp.), 158 B.R. 574 (S.D.N.Y. 1993) (motion to transfer denied where filed for forum shopping purposes); In re Columbia W., Inc., 183 B.R. 660 (Bankr. D. Mass. 1995) (28 U.S.C. § 1406(a) deals with improperly venued civil cases generally while 28 U.S.C. § 1412 deals only with cases where venue is appropriate but transfer is appropriate in the interests of justice; because the venue was not appropriate here in the first instance, the court held that § 1406(a) controlled rather than § 1412 and transferred the case back to Oregon);
In re Oklahoma City Assocs., 98 B.R. 194 (Bankr. E.D. Pa. 1989) (collecting cases). Motion should be filed promptly. In re Deabel, Inc., 193 B.R. 739 (Bankr. E.D. Pa. 1996) (motion should be filed promptly with 60 days being the "bright line" limit in that district). Only core proceedings may be transferred under 28 U.S.C. § 1412. Tultex Corp. v. Freeze Kids, L.L.C., 252 B.R. 32, 35-36 (S.D.N.Y. 2000). 28 U.S.C. § 1404(a) may provide an alternative transfer vehicle for non-core proceedings.
A contract provision requiring that actions arising under the contract be brought in a particular forum "is prima facie valid and should be enforced unless enforcement is shown by the resisting party to be 'unreasonable' under the circumstances." The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). A bankruptcy debtor is not entitled to a more lenient burden of proof. Diaz Contracting Corp. v. Nanco Contracting Corp. (In re Diaz Contracting Corp.), 817 F.2d 1047, 1053 (3d Cir. 1987); accord Envirolite Enters. v. Glastechnische Indus. Peter Lisec Gesellschaft M.B.H., 53 B.R. 1007 (S.D.N.Y. 1985), aff'd, 788 F.2d 5 (2d Cir. 1986); see also Hays and Co. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 885 F.2d 1149 (3d Cir. 1989) (ch. 11 trustee bound by arbitration agreement); Kamine/Besicorp Allegany, L.P. v. Rochester Gas & Elec. Co. (In re Kamine/Besicorp Allegany, L.P.), 214 B.R. 953, 973 (Bankr. D.N.J. 1997) (under M/S Bremen, debtor has "heavy burden" to show that enforcement would be unreasonable).
Breeden v. Aegis Consumer Funding Group Inc. (In re Bennett Funding Group, Inc.), 259 B.R. 243 (N.D.N.Y. 2001) (forum selection clauses in promissory notes warranted transfer pursuant to 28 U.S.C. § 1404(a); strong public policy interest in centralizing all core matters in bankruptcy court did not apply where district court had withdrawn the reference). [Note: In accordance with the Disputes Clause required to be included in most government contracts, see 48 C.F.R. § 52.233-1 (FAR 52.233-1), contractor claims must be submitted to the contracting officer, whose decision is subject to review in an agency board of contract appeals or the Court of Federal Claims pursuant to the Contract Disputes Act, 41 U.S.C. §§ 601- 613 ("CDA"). The CDA does not authorize appeals or actions in bankruptcy court.]