Joseph Peiffer on the Big Show Talking Venue Reform (Part 1)
Joseph Peiffer joined Doug Cooper on the Big Show again last week to talk about the new Bankruptcy Venue Reform Act of 2018 that was recently introduced in Congress. Here’s part 1 of their conversation from January 17, 2018.
Doug Cooper: Joe Peiffer with Ag & Business Legal Strategies in Cedar Rapids, Iowa is a bankruptcy lawyer and he says the first step in solving some bankruptcy venue issues has been introduced in Congress.
Joe Peiffer: The Bankruptcy Venue Reform Act of 2018 was introduced on Monday, January 8, 2018, by Republican Senator John Cornyn and Democratic Senator Elizabeth Warren. It may sound like the strangest of bedfellows with Republican Cornyn and Democrat Warren; however, the best chance of getting anything done in Congress right now is to have bipartisan support. Senator Cornyn is a ranking member of the Senate Judiciary Committee. Senator Warren is a rising Democratic star. Getting them to work together is very good for this legislation. We spoke about this legislation before Christmas, since we thought it would be introduced then, and it ended up being introduced shortly after Congress returned from its Christmas break.
DC: Did they make any changes to it, Joe?
JP: They have made only cosmetic changes. The substance of the bill is exactly like we were talking about back in December, but since it’s been filed we’ve had some really interesting developments. The people from the State of Delaware are incensed that we would do this, or have this bill introduced, and they say that our argument that having bankruptcies filed either where the headquarters of the company is or where the principal assets of the company are would promote better access to justice, they claim is false. They say that the judges in the rest of the United States are not prepared or equipped to handle large bankruptcy cases. I find that argument to be a condescending slap in the face of every bankruptcy judge that isn’t in the State of Delaware or the Southern District of New York. All of the bankruptcy judges before whom I have appeared are smart people who have worked hard to get to where they’re at and who would quickly learn what needs to be done in a larger case.
DC: Do you think you’ve got enough votes?
JP: Well, at this point we’re trying to garner more votes. It’s much easier to get people to support a concept or a bill after the bill has been introduced. Before it’s introduced, we’re talking about a concept, this is our idea of what we’d like to do. Now we have concrete language that folks can look at and see exactly what’s being proposed and why it’s being proposed. We’re building support around the country. It is important, if people are interested in having bankruptcies of companies be filed where the assets are or where the headquarters are, that they let their congressmen know about it, let their senators know, ask their congressmen to support this legislation to potentially introduce it in the House and the senators to co-sponsor it. It’s going to be a long, hard slog because the folks on the other side are very well armed. From 2003 to 2016, the State of Delaware ended up getting 735 Chapter 11 bankruptcies of companies that had no effective business ties to the State of Delaware. Those are companies that might have been from California, from Iowa, from Washington, even from Alaska or Hawaii. I was looking at a case called Lilly Robotics. It was filed in late February of last year. Of the 30 largest creditors, 20 were from the State of California, yet it was filed in Delaware. When cases are filed in Delaware or the Southern District of New York, retirees have to seek to go to New York or Delaware to find out what the Court may do to their retirement benefits. Farmers, like the farmers in VeraSun, could have to go to Delaware to see if they can get their contracts released so they can sell their grain. The involuntary creditors, like the person that extends some credit to a company, like the guy on Main Street that perhaps is selling to the company and didn’t get paid on time could be hauled off to the court in Delaware or New York on a preference theory saying that well, you got paid a little late and the payment you received within 90 days of filing the bankruptcy is a preference. That becomes an economic burden and hardship for the people that are drug halfway or all the way across the country to defend themselves, and in many instances they’ll make a deal and pay something for certain, either to make sure they’ve gotten rid of the claim with the creditor despite the fact that they may have good defenses.
DC: Joe Peiffer with Ag & Business Legal Strategies in Cedar Rapids is a bankruptcy lawyer. I’m Doug Cooper on the Big Show.
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Categories: In the Media, Legislation, Venue