Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 1, 2021 erstellt
Beschreibung:
Forum shopping has long been a key feature of large case chapter 11 practice. In recent years, however, forum shopping has shifted from the phenomenon of debtors picking a judicial district to picking individual judges to hear their cases. This Article documents the rise of judge shopping in big chapter 11 cases, and shows how it has been facilitated—sometimes deliberately—by bankruptcy courts’ local rules. The result has been an extraordinary concentration of big chapter 11 cases before a handful of judges: 55% of the large public company bankruptcy cases filed in 2020 were heard by just three of the nation’s 375 bankruptcy judges.Judge shopping has fundamentally corrupted the chapter 11 system in three ways. First, judge shopping has a chilling effect on creditor behavior. Judge shopping by debtors creates undermines creditors’ confidence that they are receiving a fair adjudication before a neutral tribunal. This in turn incentivizes creditors to settle more cheaply with debtors and to not raise even meritorious objections. Second, judge shopping undermines the adversarial process. The concentration of cases before a few judges means that attorneys anticipate that they are likely to make future appearances before those judges. This repeat player dynamic encourages creditors’ attorneys to pull their punches and not be zealous advocates for their clients because they fear that angering the judge will affect their future business flows. Third, judge shopping appears to be outcome determinative. This Article shows that approval of super-high-speed bankruptcy plans—in contravention of clear statutory timelines—has been almost exclusively by the three judges who have been landing most of the large, public company bankruptcy cases. These super-speed cases are approved in as little as 24 hours, suggesting that these judges are sought not for their expertise, but for their willingness to accommodate debtors, as there is no opportunity for expertise to reflect itself in such a rapid proceeding