From Deseret News archives:
Cannon starts probe of bankruptcy system
Utahn suspects judges compete for big cases
As chairman of the House Judiciary Subcommittee on Commercial and Administrative Law, Cannon, R-Utah, said trends suggest that shopping for friendly courts by bankruptcy professionals is increasing, which may cost creditors and debtors.
He said at a hearing Wednesday that those trends "call into question whether the integrity of the bankruptcy system, at least with respect to large Chapter 11 (reorganization) cases, is being compromised."
UCLA law professor Lynn M. LoPucki testified his research shows that since 2000, "The Delaware Bankruptcy Court has captured 34 percent of all large, public company filings in the United States, and the New York Bankruptcy Court has captured 20 percent." The remainder are scattered nationally.
LoPucki said those courts offer professionals higher fees and more professional-friendly rules. Other courts nationally, at the urging of their local professionals, have begun to mimic them, apparently to seek a share of the bigger cases.
Why? "For the judge, a large bankruptcy case is a career opportunity," LoPucki said. "Judges who attract numerous large cases are likely to become celebrities."
LoPucki said big corporations can file for bankruptcy where they incorporate, where their headquarters are located, where they have their principal assets or where the case of an affiliated corporation is already pending. He said that allows large corporations to file virtually anywhere they choose.
He said corporation executives "usually have little experience with bankruptcy courts," so they depend heavily on lawyers, accountants and others on where to file. "It follows that courts wishing to attract cases must appeal to the debtor's executives, attorneys and post-petition lenders."
He said they do that by establishing a "reputation for generosity with professional fees and tolerance for the professionals' conflicts of interest."
Comments
- Mexican consulate in SLC dies 1:47 p.m.
- eBay fined for selling perfumes 1:46 p.m.
- Debate opens on health care bill 1:44 p.m.
- Man arrested in screwdriver assault 1:42 p.m.
- Police seek man in underwear thefts 1:42 p.m.
- 5 injured in past week near Moab 1:41 p.m.
- Beach dispute heading to high court 1:40 p.m.
- Retrial in paraplegic murder case 1:39 p.m.
- Court hears Vioxx arguments 1:38 p.m.
- High court won't hear speech suit 1:37 p.m.
- Hall mouths off about hate of Utah
890 - Cougars beat Utes in overtime
480 - Max Hall issues apology
357 - Hall's pain reflects self-betrayal
235 - BYU is champion of the state
140 - Hall reprimanded by MWC
138 - Man trapped in Nutty Putty cave dies
120 - Utes won't respond to Hall
116 - Cave to be sealed with body inside
116 - Rivalry Week is highly profane
91
I wanted to tell them not to go. I dropped subtle hints. "My money is on...
When I was a kid, I worshipped my grandpa. He was undoubtedly my hero....
Max embarrassed BYU and the LDS church. Something must be done to reign in...
Yes, "All Knowing | 12:48 p.m.", I don't see where he's comming from. I...
Shame on you! What Max did was dispicable, extremely selfish, and completely...
We will probably lose. Those are two of the few that play some defense....
as an aside to all of this, some of most dire anti max hall comments that i...
Buy where you get the best price for the quality and service. It keeps...
I am a BYU fan and an alumnus of BYU but was very disappointed on the...
'Because anyone can see that it's a formula that's well worked for the gay...
You can thank God all you want for your success, however it is neither the...
Amy - Very articulate, well written opinion! As an out-of-state BYU fan, I...



You can be the first to comment on this story.