Vanderbilt Law Review

First Page



There is something a little desperate about the relentless criticism of Delaware's bankruptcy judges. Prior to 1990, nobody thought much about Delaware as a filing location for large corporate debtors. Thereafter, following in the wake (or jet-stream, perhaps) of the Continental Airlines bankruptcy, more and more large debtors began filing their bankruptcy cases in Delaware. Because bankruptcy's venue provision permits debtors to file for bankruptcy in their state of incorporation, and so many large firms are incorporated in Delaware, most large corporate debtors are entitled to choose Delaware for their bankruptcy case if they wish. Since 1990, the critics have been up in arms because many debtors have indeed opted for Delaware. These critics persuaded the National Bankruptcy Review Commission to propose in its 1997 final report that the corporate debtor's state of incorporation be removed from its venue options, and an anti-Delaware provision was subsequently inserted into proposed bankruptcy legislation. Congress has not done anything thus far, but the complaints continue.