Where will my Business File Bankruptcy?

by DeLadurantey Law Office, LLC on April 18, 2014

Courthouse columnsIndividuals seeking bankruptcy protection file their case in the district where they are domiciled or reside. However, if your business is planning to file a bankruptcy case, the answer of where to file may not seem so clear.

Generally, a debtor may file bankruptcy in the district where the person or entity has its domicile, residence, principal place of business, or principal assets. The principal place of business is the location where general supervision of employees occurs. Applying this general rule can get complicated if your company maintains its headquarters in one state, incorporated itself in a different state and holds the majority of its assets in a third and different state.

In order to prevent a business from “forum shopping” or filing in a district that is more beneficial to the entity than other districts, the law provides that a business is deemed to be domiciled in the state where the entity is formed. Therefore, a New York business that was incorporated as a Wisconsin corporation is domiciled in Wisconsin for purposes of filing its bankruptcy case. This is true even if the company does not have an office located in Wisconsin.

Although forum shopping is discouraged, it is possible to file a case in a eligible district or request the matter to be transferred to a different district. A transfer can be made in the interest of justice or for the convenience of the parties.

At DeLadurantey Law Office, LLC, we help businesses and families find their way out of highly difficult financial situations. We provide the advice and guidance you need in obtaining debt relief through bankruptcy and debt negotiations. We can also assist you in defending a foreclosure action. Contact us at 414-377-0518 to discuss how our Milwaukee bankruptcy attorneys can assist you. Like us on Facebook.

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