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109. A debtor further may file its petition in any place where it is domiciled (i.e. incorporated), where its principal workplace in the United States is situated, where its primary possessions in the United States lie, or in any location where any of its affiliates can file. See 28 U.S.C.Proposed modifications to the location requirements in the United States Bankruptcy Code could threaten the United States Bankruptcy Courts' command of global restructurings, and do so at a time when a lot of the US' perceived competitive advantages are decreasing. Specifically, on June 28, 2021, H.R. 4193 was introduced with the purpose of amending the venue statute and customizing these place requirements.

Both propose to get rid of the ability to "online forum store" by excluding a debtor's place of incorporation from the venue analysis, andalarming to global debtorsexcluding cash or cash equivalents from the "primary properties" equation. Additionally, any equity interest in an affiliate will be considered located in the exact same area as the principal.

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Typically, this statement has been focused on questionable 3rd party release provisions executed in recent mass tort cases such as Purdue Pharma, Boy Scouts of America, and many Catholic diocese personal bankruptcies. These provisions frequently force lenders to release non-debtor 3rd parties as part of the debtor's plan of reorganization, despite the fact that such releases are arguably not permitted, at least in some circuits, by the Personal bankruptcy Code.

In effort to mark out this habits, the proposed legislation claims to restrict "forum shopping" by restricting entities from filing in any location except where their business head office or principal physical assetsexcluding cash and equity interestsare situated. Ostensibly, these expenses would promote the filing of Chapter 11 cases in other United States districts, and guide cases far from the favored courts in New York, Delaware and Texas.

Regardless of their laudable function, these proposed amendments might have unforeseen and potentially adverse repercussions when seen from a worldwide restructuring prospective. While congressional testimony and other commentators presume that venue reform would merely ensure that domestic business would submit in a different jurisdiction within the US, it is an unique possibility that international debtors might hand down the US Insolvency Courts altogether.

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Without the factor to consider of cash accounts as an avenue toward eligibility, many foreign corporations without concrete possessions in the US might not qualify to submit a Chapter 11 personal bankruptcy in any US jurisdiction. Second, even if they do qualify, worldwide debtors might not have the ability to depend on access to the typical and practical reorganization friendly jurisdictions.

Provided the intricate issues frequently at play in a worldwide restructuring case, this may cause the debtor and financial institutions some unpredictability. This uncertainty, in turn, might motivate global debtors to file in their own nations, or in other more advantageous countries, rather. Especially, this proposed place reform comes at a time when lots of nations are replicating the United States and revamping their own restructuring laws.

In a departure from their previous restructuring system which emphasized liquidation, the new Code's objective is to restructure and protect the entity as a going concern. Therefore, debt restructuring arrangements might be authorized with as little as 30 percent approval from the total financial obligation. However, unlike the United States, Italy's brand-new Code will not include an automatic stay of enforcement actions by lenders.

In February of 2021, a Canadian court extended the nation's approval of 3rd party release arrangements. In Canada, companies generally restructure under the standard insolvency statutes of the Business' Lenders Plan Act (). 3rd party releases under the CCAAwhile fiercely objected to in the USare a typical aspect of restructuring strategies.

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The recent court choice makes clear, though, that despite the CBCA's more restricted nature, 3rd party release arrangements might still be appropriate. Therefore, business might still obtain themselves of a less cumbersome restructuring offered under the CBCA, while still receiving the benefits of 3rd party releases. Effective since January 1, 2021, the Dutch Act Upon Court Verification of Extrajudicial Restructuring Plans has actually produced a debtor-in-possession procedure conducted beyond official insolvency procedures.

Reliable since January 1, 2021, Germany's new Act on the Stabilization and Restructuring Framework for Organizations offers pre-insolvency restructuring procedures. Prior to its enactment, German companies had no alternative to restructure their financial obligations through the courts. Now, distressed companies can call upon German courts to reorganize their financial obligations and otherwise preserve the going issue value of their service by utilizing much of the very same tools readily available in the United States, such as maintaining control of their organization, enforcing pack down restructuring strategies, and carrying out collection moratoriums.

Influenced by Chapter 11 of the United States Insolvency Code, this new structure simplifies the debtor-in-possession restructuring process mainly in effort to assist little and medium sized businesses. While prior law was long criticized as too pricey and too complicated since of its "one size fits all" method, this brand-new legislation integrates the debtor in ownership design, and attends to a structured liquidation procedure when required In June 2020, the UK enacted the Corporate Insolvency and Governance Act of 2020 ().

Notably, CIGA offers a collection moratorium, revokes certain provisions of pre-insolvency agreements, and allows entities to propose an arrangement with shareholders and lenders, all of which allows the development of a cram-down plan comparable to what might be accomplished under Chapter 11 of the United States Insolvency Code. In 2017, Singapore adopted enacted the Companies (Modification) Act 2017 (Singapore), which made significant legal changes to the restructuring arrangements of the Singapore Companies Act (Cap 50) 2006.

As a result, the law has considerably improved the restructuring tools offered in Singapore courts and propelled Singapore as a leading center for insolvency in the Asia-Pacific. In May of 2016, India enacted the Insolvency and Insolvency Code, which completely upgraded the insolvency laws in India. This legislation seeks to incentivize additional financial investment in the country by providing higher certainty and effectiveness to the restructuring process.

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Offered these recent changes, worldwide debtors now have more options than ever. Even without the proposed restrictions on eligibility, foreign entities might less require to flock to the US as before. Further, ought to the US' location laws be modified to prevent simple filings in particular hassle-free and helpful locations, global debtors might begin to consider other locales.

Special thanks to Dallas associate Michael Berthiaume who prepared and authored this content under the supervision of Rebecca Winthrop, Of Counsel in our Los Angeles office.

Consumer personal bankruptcy filings rose 9% in January 2026 compared to January 2025, with 44,282 customer filings that month alone. Industrial filings leapt 49% year-over-year the greatest January level since 2018. The numbers reflect what debt experts call "slow-burn monetary stress" that's been developing for years. If you're struggling, you're not an outlier.

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Consumer bankruptcy filings amounted to 44,282 in January 2026, up 9% from January 2025. Industrial filings struck 1,378 a 49% year-over-year dive and the greatest January industrial filing level since 2018. For all of 2025, consumer filings grew almost 14%.