4th Cir.: Truck Insurance v. Kaiser Gypsum (on remand from the U.S. Supreme Court)- Good Faith In Plan Confirmation Ed Boltz Thu, 05/01/2025 - 01:38 Summary: This long-running asbestos bankruptcy saga involving Kaiser Gypsum and its affiliate Hanson Permanente Cement returned to the Fourth Circuit following a Supreme Court remand, which held that Truck Insurance Exchange ("Truck") qualified as a “party in interest” under § 1109(b) of the Bankruptcy Code. This opened the door for Truck to assert objections to the proposed § 524(g) reorganization plan, which had previously been rebuffed for lack of standing. On remand, the Fourth Circuit considered Truck’s two central challenges: (1) that the plan was not proposed in good faith under § 1129(a)(3), and (2) that it failed to meet multiple statutory requirements of § 524(g). Truck, the Debtors’ primary liability insurer, contended that the plan left it exposed to fraudulent asbestos claims because it allowed insured claims to be litigated in the tort system without parallel anti-fraud mechanisms required for uninsured claims processed through the Trust. It also challenged whether the Trust truly “assumed” liabilities, received “future payments,” or could realistically exercise control over the reorganized Debtors as required by § 524(g). The Fourth Circuit affirmed the district court’s confirmation of the plan, finding no clear error in its good faith determination and concluding that all statutory requirements were met. The court emphasized that the plan was the product of arms-length negotiations, was supported by all claimants except Truck, preserved going-concern value, and maximized estate recovery—core goals of the Code. The panel rejected Truck’s concerns as speculative and unsupported by concrete evidence of fraud. It also held that the Trust’s entitlement to the Debtors’ equity upon default of a secured note satisfied § 524(g)’s control and funding requirements. Judge Quattlebaum concurred separately, expressing discomfort with the refusal to adopt basic anti-fraud protections for insured claims but agreed that the absence of evidence precluded reversal under the clear error standard. Commentary: Although this case arose in the rarefied world of § 524(g) trusts and asbestos litigation, the Fourth Circuit’s clear-eyed approach to evaluating good faith provides helpful reinforcement of long-standing Chapter 13 principles. For consumer debtors, it affirms that using available legal tools (e.g., exemptions, selective surrender, or even aggressive strip-downs) is not “bad faith” if done transparently and for the purpose of reorganization. When read alongside its recent opinion in Trantham v. Tate (4th Cir. 2002), 301 B.R. 408 (W.D.N.C.), aff’d 52 F. App’x 713 (4th Cir. 2002), the Fourth Circuit’s Truck Insurance decision reinforces a consistent and borrower-protective interpretation of the “good faith” requirement under both § 1325(a)(3) and § 1129(a)(3): namely, that bankruptcy courts must assess good faith under a flexible, case-specific “totality of the circumstances” test, and not rely on categorical rules or creditor-driven narratives of strategic behavior.  It also reinforces the burden on objecting parties—whether creditors or trustees—to substantiate allegations of bad faith with facts and actual provisions of the Bankruptcy Code, not just suspicions  or wistful glances towards standard practices. In both consumer and corporate contexts, good faith remains a fact-intensive inquiry that must ultimately align with the structure and goals of the Bankruptcy Code: fairness, transparency, and the honest but unfortunate debtor’s fresh start. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document truck_insurance_v_kaiser_gypsum.pdf (208.93 KB) Category 4th Circuit Court of Appeals

4th Cir.: Paredes v. Zen Nails-Presumptive Fees Schedules are not Dispositive  Ed Boltz Wed, 04/30/2025 - 22:47 Summary: In this Fair Labor Standards Act (“FLSA”) case, the Fourth Circuit vacated a fee award that slashed plaintiffs' requested attorneys’ fees by more than half, holding that the district court erred by treating the fee guidelines in the District of Maryland’s Local Rules as “presumptively reasonable” and improperly requiring justification for exceeding them. After prevailing at trial, plaintiffs Flor Arriaza de Paredes and Francisco Tejada Lopez sought $343,189.85 in fees, supported by declarations and an inflation-adjusted matrix. The district court awarded just $167,115.49. The key dispute on appeal: whether the court lawfully relied on the Local Rules’ Appendix B fee ranges to cabin hourly rates. The Fourth Circuit found that although district courts may consider local matrices, they cannot elevate them to presumptive status. Doing so effectively replaces the required market-based analysis with a judicially-created baseline untethered from actual prevailing rates. Despite acknowledging plaintiffs’ supporting declarations and complexity of litigation, the district court's repeated reliance on the Local Rule matrix—and its blanket refusal to approve rates above that matrix—tainted the fee determination with legal error. The panel vacated the fee award and remanded, emphasizing that courts must consider a full range of evidence—declarations, prior awards, surveys, and judicial knowledge—without anchoring to a single, static matrix. The Fourth Circuit also took care to reaffirm the district court’s discretion on remand, but warned that overreliance on outdated matrices increasingly invites reversal. Commentary: While this decision does not invalidate presumptive Chapter 13 fees,  it does reaffirm that they are administrative tools—not binding fee caps.   Similarly,  attorneys fees awarded under consumer rights fee shifting provisions,  cannot be dispositively set in stone.    When challenged or exceeded,  courts must instead  assess reasonableness based on the totality of the evidence—not just local tradition or standing orders,   considering  all relevant evidence, including: Affidavits from consumer attorneys, Market surveys or updated fee matrices; Prior fee awards in similar cases, Complexity and skill involved, and The court’s own knowledge. This strengthens the hand of debtor’s counsel seeking higher fees in complex or non-standard cases and may encourage some courts to revisit decade-old fee schedules that lag inflation and market practice. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document paredes_v._zen_nails.pdf (142.28 KB) Category 4th Circuit Court of Appeals

4th Cir.: Roberts v. Carter-Young- Fair Credit Reporting Act – Reasonable Investigation – Legal vs. Factual Disputes Ed Boltz Wed, 04/30/2025 - 20:56 Summary: The Fourth Circuit vacated and remanded the dismissal of Shelby Roberts’ Fair Credit Reporting Act (“FCRA”) claim against a debt collector, holding that the district court erred in concluding that disputes involving legal issues are categorically outside the scope of the FCRA’s investigation requirements. Roberts disputed a $791 charge from her former landlord, which she alleged stemmed from retaliatory and fabricated damages after she refused to vacate her apartment early. The debt was referred to Carter-Young, Inc., a collection agency, which reported the debt to the credit bureaus. After receiving notice from the credit reporting agencies of Roberts' disputes, Carter-Young conducted no independent investigation and instead simply recertified the debt based on the landlord’s affirmation. Roberts sued under 15 U.S.C. § 1681s-2(b), alleging Carter-Young negligently and willfully failed to conduct a “reasonable investigation.” The district court dismissed her complaint, finding that the dispute was legal in nature—centered on claims of fraud and lease interpretation—and thus not subject to FCRA enforcement. On appeal, the Fourth Circuit rejected this rigid factual/legal dichotomy. Instead, the Court adopted a more nuanced standard, aligning with the Second and Eleventh Circuits: A furnisher’s duty to investigate under the FCRA extends to disputes that allege inaccuracies which are “objectively and readily verifiable,” regardless of whether they stem from legal or factual contentions. The Court explained that furnishers are not required to resolve complex legal disputes or make credibility determinations, but they must investigate when the inaccuracies can be reasonably verified without functioning as a tribunal. Because the district court applied the wrong legal standard in dismissing Roberts’ claim, the case was remanded for further proceedings under the “objectively and readily verifiable” standard. Commentary: This decision is a significant win for consumer advocates and provides an important clarification in the murky intersection of legal disputes and credit reporting obligations under the FCRA. While many debt disputes—particularly in landlord-tenant relationships—involve contractual and legal elements, this ruling ensures that consumers are not left without recourse simply because the underlying facts implicate legal theories. The Court rightly emphasized that debt collectors and furnishers, like Carter-Young, cannot escape their statutory duty to investigate simply by labeling a dispute as “legal.” The key question is whether the claimed inaccuracy can be objectively verified—such as whether a charge was actually incurred, whether a debt was paid, or whether an item was actually replaced (as Roberts disputed about a stove). Furnishers and credit agencies often dismiss discharge disputes by arguing they involve legal determinations—e.g., whether a debt was “actually” discharged in a bankruptcy.  Here the Fourth Circuit has explicitly rejected the legal-vs-factual distinction as a bar to liability. The Court held that even legal disputes can give rise to FCRA claims so long as the underlying facts are objectively and readily verifiable—which is frequently the case with bankruptcy discharges, as the discharge order and schedules are public record and clearly show which debts were included. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document roberts_v._carter-young.pdf (201.34 KB) Category 4th Circuit Court of Appeals

4th Cir.: In Re Star Development- Account is Property of the Estate Despite Assertion of Earmarking and Trust. Ed Boltz Wed, 04/30/2025 - 20:53 Summary: Mukesh Majmudar and Hopkins Hospitality Investors, LLC (HHI) sought to recover $1 million deposited into an account titled in the name of Star Development Group, LLC—the Chapter 7 debtor entity that Majmudar also managed. The funds were originally posted as collateral for a letter of credit related to a mechanic’s lien on a hotel construction project. After Star filed bankruptcy, the Trustee included the account as property of the estate. Majmudar and HHI filed an adversary proceeding, asserting that the funds were not estate property under three theories: (1) the "earmarking" doctrine; (2) a resulting trust for the benefit of the bank; and (3) 11 U.S.C. § 541(b)(1)’s exclusion for powers exercisable solely for the benefit of others. The bankruptcy court (Judge Guttman), affirmed by the district court (Judge Bennett), rejected all three theories on summary judgment. The Fourth Circuit affirmed in a per curiam unpublished opinion by Judge Wynn, joined by Judges Wilkinson and Niemeyer. The Court found that: Earmarking failed because there was no written agreement that the Debtor could only use the funds to pay a specific creditor, nor were the funds actually disbursed to satisfy any antecedent debt. Resulting trust was unsupported because neither the account documents nor Debtor’s sworn filings established any trust relationship, and all records indicated the Debtor was treated as owner. Section 541(b)(1) did not apply, as this was not a “power exercisable solely for the benefit of another,” nor did the circumstances resemble those in T & B Scottdale Contractors, where clear contractual obligations and third-party beneficiaries existed. Commentary: While this case serves as a sharp reminder that even creatively repurposed doctrines like earmarking and implied trusts will not rescue insiders who have blurred entity boundaries and failed to memorialize restrictions on asset control. But that caution may also provide a roadmap  for debtors in bankruptcy to protect funds provided by third-parties  from  unnecessarily being applied towards general unsecured creditors  rather than secured or priority claims.  Earmarking  in bankruptcy would require establishing the following elements: A  third party advances funds to the debtor The funds must come from a third party, not from the debtor’s own resources. The new funds are specifically designated to pay a particular, pre-existing debt There must be an agreement—explicit or implied—among the debtor, the third-party, and perhaps the original creditor that the new funds will be used to pay that specific antecedent debt. The funds are actually used to pay that designated creditor The payment must go  to the old creditor, or at least be used by the debtor for that exact purpose. The debtor does not have control or discretion over the use of the funds If the debtor could use the funds for any purpose (i.e., they are not “earmarked”), then the defense fails. Courts look closely at whether the debtor had authority to disburse the funds to anyone other than the specified creditor. Commentary: With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document in_re_star_development.pdf (180.86 KB) Category 4th Circuit Court of Appeals

E.D.N.C.: Goddard v. Burnett- Lack of Good Faith in Chapter 13 Retention of Luxury Vehicles Ed Boltz Wed, 04/30/2025 - 16:22 The District Court affirmed the Bankruptcy Court’s denial of confirmation of Bobby Goddard’s Chapter 13 plan, holding that the plan was not proposed in good faith under 11 U.S.C. § 1325(a)(3), despite the debtor’s full compliance with the means test under § 1325(b). Goddard, an above-median income debtor and Army veteran suffering from PTSD, proposed a plan in which he would retain three secured vehicles—a Corvette, a GMC Sierra pickup truck, and a Genesis sedan—while making minimal distributions to unsecured creditors. The trustee objected to confirmation on the basis that retaining all three vehicles was not necessary and was inconsistent with the debtor’s obligation to propose the plan in good faith. The Bankruptcy Court agreed, finding that although BAPCPA  and Bledsoe v. Cook   70 F.4th 746 (4th Cir. 2023)  permits above-median debtors to deduct payments on secured debts when calculating disposable income under the means test, the retention of the vehicles in this case—especially when viewed alongside the debtor’s prepetition borrowing activity—reflected an abuse of the spirit and purpose of Chapter 13. The court emphasized that the debtor would emerge from bankruptcy with three unencumbered vehicles while discharging over $78,000 in unsecured debt. On appeal, Goddard argued that his full compliance with § 1325(b)’s means test should insulate the plan from any further scrutiny under the good faith standard of § 1325(a)(3). Relying on Bledsoe v. Cook, 70 F.4th 746 (4th Cir. 2023), he contended that the Bankruptcy Code leaves no room for judicial second-guessing where the debtor’s deductions are authorized under the means test. The District Court disagreed, holding that § 1325(a)(3)’s good faith requirement remains a separate, independent confirmation standard that survived BAPCPA. While Bledsoe confirmed a debtor’s right to claim allowed expenses under the means test, it did not displace § 1325(a)(3), nor did it address whether a debtor’s use of allowable deductions could, under the totality of circumstances, still reflect bad faith. The District Court found the Bankruptcy Court’s factual findings not clearly erroneous and concluded that the plan’s structure—prioritizing retention of luxury vehicles while providing only token payments to unsecured creditors—violated the good faith requirement. Commentary: The bankruptcy adaga that a debtor "shouldn't drive a nicer car than the judge"  still  holds under this decision.  That notwithstanding,  hopefully bankruptcy judges and trustees also recognize current conditions where the average monthly car payment for  vehicles is,  according to Bankrate.,  around $742.  That amount is the average for all consumers, but  those  filing bankruptcy  overwhelmingly have subprime credit scores,  increasing their costs. The court’s ruling in Goddard risks reviving the pre-BAPCPA  “smell test” that Congress deliberately replaced with a more mechanical means test. While the court paid lip service to Bledsoe v. Cook, its approach invites subjective moralizing about what a debtor “deserves” to keep, which runs counter to the explicit Congressional purpose and structure of Chapter 13 that not only limited judicial activism but privileged secured claims over unsecured creditors. The potential for improper implicit biases,  found in  recent research to have a statistically significant effect on  dismissal  rates for bankruptcy judges and trustees,  to further affect  this already subjective standard is also a troubling consequence of this holding. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document goddard_v._burnett.pdf (353.76 KB) Category Eastern District

Bankr. W.D.N.C.: In re Popp- Dismissal pursuant to § 707(a) for Nondisclosure and Lack of Cooperation Ed Boltz Thu, 04/24/2025 - 15:53 Summary: Michael and Mary Popp filed a Chapter 7 petition in May 2024, but the case was dismissed under 11 U.S.C. § 707(a) after the debtors failed—despite months of requests and hearings—to adequately explain what happened to more than $123,000 in proceeds from the sale of their Florida home less than two years before filing. The initial Statement of Financial Affairs omitted the home sale entirely. When the Chapter 7 Trustee independently discovered the transaction, he requested documentation for the numerous five-figure transfers that occurred shortly thereafter. The Popps eventually amended their SOFA to include the sale but never properly disclosed the nature, purpose, or recipients of most of the transfers—relying instead on cryptic marginal notes like “mom pay bk” and “? Cash” scribbled next to the withdrawals. The Trustee made multiple follow-up requests and even met with counsel, who promised to improve the disclosures. Yet the supplemental productions were incomplete, inconsistent, or simply unresponsive. By the November 2024 hearing, the Trustee still had no clear understanding of how the funds were spent. Although the Debtors testified and offered some clarifications at the hearing—especially the Female Debtor—the testimony didn’t align with the documents, the amendments were never properly made, and the Trustee was still unable to administer the estate. The Court found that although the Popps did not act in bad faith, their failure to cooperate or to timely and accurately respond left the Trustee without a viable path forward. Dismissal, rather than denial of discharge or contempt proceedings, was deemed the most appropriate remedy. Commentary: This case reminds practitioners that incomplete cooperation can be just as fatal as outright fraud.    Judge Laura Beyer’s opinion doesn’t suggest that the Popps were hiding money or acting in bad faith—just that their inability (or unwillingness) to document where $123,000 went left the Trustee in the dark, and that darkness is incompatible with the “sunlight” required for Chapter 7 administration. Though the Debtors eventually amended their SOFA and produced some records, the Court made clear that half-answers and annotated bank statements—especially ones with vague notations like “paid Bank OZK” or “bought camper”—do not meet the standard of full, candid, and prompt disclosure that Chapter 7 demands. The fact that the Trustee had to repeatedly follow up, and that even the night before the hearing the Debtors were still scrambling to identify transactions, reflected more than just bad timing; it showed the systemic failure to take the bankruptcy process seriously. It is,  however,  difficult to square this decision,  which dispenses with the Popp's reliance of counsel defense ("The Debtor cannot rely on the advice of counsel defense regarding errors in the Schedules where the Debtor has declared under penalty of perjury that he has read the Schedules, and to the best of his knowledge they were true and correct.”)  without any reference to the recent Fourth Circuit Court of Appeals published decision in Sugar v. Burnett   where a dismissal  with a bar to refiling for five (5) years (which is if anything more punitive than a dismissal under § 707(a)) was vacated and remanded specifically   for a determination of whether that debtor had a valid  reliance on counsel defense. Complicating Popp (and Sugar as well)  is that once questions arise about the allocation of blame between  debtor and their attorney,  continued representation by that lawyer increasingly appears to present an unwaivable conflict of interest.  Whether debtors (by definition broke) can afford to hire new,  independent counsel  or whether the other  lawyers (and the judge)  in the case have obligations to report the matter to the state bar are further problems. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document in_re_popp.pdf (416.05 KB) Category Western District

Book Review: Berman, Jillian- Sunk Cost: Who's to Blame for the Nation's Broken Student Loan System and How to Fix It Ed Boltz Wed, 04/23/2025 - 20:50 Available at:  Your Local Bookstore  or https://press.uchicago.edu/ucp/books/book/chicago/S/bo244056598.html Summary: Exposes the forgotten origins of the student loan system, how politicians have attempted to fix it, and the life-altering damage borrowers face.   Student-loan horror stories are a dime a dozen. But students today are faced with a seemingly insurmountable paradox: Research consistently shows that the clearest viable option to financial stability is a college degree. But if and when Americans decide to pursue diplomas, student loan payments quickly follow, and even after securing full-time employment, many borrowers struggle to make ends meet for years. In Sunk Cost, journalist Jillian Berman explores how the nation’s student loan program went from a well-intentioned initiative aimed at helping low- and middle-income students afford college to one that traps borrowers in long-term debt.   Berman interviewed dozens of borrowers and policymakers and dug into the archives to unearth the true causes of the student loan problem. A couple of generations ago, policy makers generously subsidized Americans’ college educations because they knew it would be advantageous for the entire country: a more educated population meant better quality of life for all. But today, higher education is viewed as an individual goal, so students and their families are expected to be on the hook for it themselves. Berman explains how this enormous shift happened, which industries benefit from it, and what it means for college-going Americans today. She shares real-life stories of college graduates who are being crushed under some of the harshest consequences of the student loan system. These borrowers pursued higher education in hopes of a better life and yet some have been trapped in debt for decades, making it difficult to put food on the table, much less imagine a life beyond debt.   By connecting personal accounts to the policy history of student loans, Berman makes clear that if American society continues to push students toward higher education, but fails to truly subsidize it, the financial strain will become unbearable for all but the most privileged. The current system is broken, but Berman proposes that significant changes are possible, and will require political will from state lawmakers and Congress, along with a philosophical shift, to tackle one of the largest consumer finance challenges of our time. Commentary: Jillian Berman's Sunk Cost is,  along with  Ryann Liebenthal's Unburdened: Student Debt and the Making of an American Crisis,  an excellent history and review of how the student lending system began with the GI Bill (and the flaws  inherent even from the start)  through  the present.  The attention paid to more recent efforts,  both grassroots arising from the Occupy Wall Street movement and by various federal entities,  is particularly  excellent.   Despite including a few pages about changes over the last 50 years in how student loans are treated in bankruptcy,  I am still hoping and waiting for  an investigative journalist to eventually put similar time and effort into researching and writing more about this vital aspect of student loans.   As a bankruptcy geek,  I just really want to know what happened to Marie Brunner after she became the poster child for the draconian and cruel undue hardship test in bankruptcy. With proper attribution,  please share this post.  Blog comments Category Book Reviews

N.C. Ct. of App.: Paradigm Park Holdings v. Global Growth Holdings Ed Boltz Wed, 04/23/2025 - 16:08 Summary: The North Carolina Court of Appeals reversed summary judgment granted to the landlord, Paradigm Park, in a commercial lease dispute, finding that material questions of fact existed as to whether it had waived its right to collect rent by accepting mortgage and maintenance payments in lieu of rent for nearly four years. The Court also revived the tenant’s unjust enrichment counterclaim, reasoning that services provided outside the scope of the lease agreement might give rise to equitable compensation. Commentary: This case reinforces the viability of waiver by conduct as a defense in contract disputes, not just commercial leases. For debtors in consumer bankruptcy this ruling underscores that a creditor’s  acceptance of alternative performance (e.g., partial or substituted payments) can defeat later efforts to retroactively enforce the original payment terms.  This may also preclude lienholders from asserting that a default resulted merely due to the filing of a bankruptcy  would,  absent a reaffirmation and after accepting payments,  and allowed repossession. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document paradigm_park_v._global_growth.pdf (145.38 KB) Category NC Court of Appeals

 OFFER IN COMPROMISE (“OIC”) FOR  SBA EIDL LOANS UPDATE Is the SBA accepting OIC applications for SBA EIDL loans? If you search online, you'll find conflicting answers. Most results indicate noYesterday I (Jim Shenwick, Esq) called the SBA EIDL Customer Service and spoke with a representative who said the following:The SBA were doing offers in compromise on a case-by-case basis on a loan-by-loan basis”.  They would provide me with no further information and my take away from the telephone call was that under the right circumstances and the right fact pattern the SBA would consider an OIC, however the SBA is looking for full repayment of SBA EIDL loans and they would be reluctant to accept discounted or reduced payments. Clients or their advisors with questions about SBA EIDL loans are encouraged to contact Jim Shenwick, Esq.Jim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe help individuals & businesses with too much debt!

Law Review: LoPucki, Lynn M., False Venue Claims Signed Under Penalty of Perjury Ed Boltz Tue, 04/22/2025 - 16:42 Available at:  https://ssrn.com/abstract=5068891 Abstract: In a study of venue for the one hundred ninety-five large, public company bankruptcies filed from 2012 through 2021, I discovered nine cases (5%) in which the companies’ venue claims were in apparent conflict with what the debtors themselves stated on their petitions to be the locations of the companies’ principal places of business and principal assets. Eight of the nine proceeded to confirmation in an improper venue. Although it is routine for large, public companies and the courts in which they file to ignore the Bankruptcy Code and Rules, these cases take Chapter 11’s lawlessness to a new level. Top officers of large, public companies, with the advice of counsel, signed apparently false venue claims under penalty of perjury. This Article analyzes the nine cases and concludes that (1) no apparent basis for the venue claims in seven of the nine cases exists, and (2) the apparent basis for the venue claims in one of the other two cases is both legally implausible and in conflict with the relevant facts stated in the petitions. Because private companies were not included in this study, these nine cases are probably a minority of the big cases in which false venue claims were signed under penalty of perjury. The carelessness regarding venue in these cases shows the depth to which the competition for big cases has taken a few United States Bankruptcy Courts.  Commentary: While questions about venue in consumer cases are unaddressed in this article,  it is worth contrasting the venue selection questions in the bankruptcy petition form for individuals: 6. Why you are choosing this district to file for bankruptcy Check one:  Over the last 180 days before filing this petition, I have lived in this district longer than in any other district.  I have another reason. Explain. (See 28 U.S.C. § 1408.) with that for corporations: 11. Why is the case filed in this district?  Check all that apply:   Debtor has had its domicile, principal place of business, or principal assets in this district for 180 days immediately preceding the date of this petition or for a longer part of such 180 days than in any other district.   A bankruptcy case concerning debtor’s affiliate, general partner, or partnership is pending in this district.  That consumers are able to provide an explanation for the choice of venue other than just that it is their residence would seem on one hand to allow a response, in something in the the vein that "Venue is for the convenience of the debtor(s) & believing creditors will have no objection."  At the same time,  by ignoring that 11 U.S.C.  1408 can also provide proper venue for individuals based on the location of principal assets or related cases,  the form may be overly restrictive.  With sympathy for the corporate devil,  the absence of space to provide an alternate basis for venue may also be a deficiency. It is interesting to contemplate how  courts friendly to venue shopping in large corporate cases  would  respond to consumer bankruptcy filings with similarly "manufactured venue".    Could a consumer debtor follow the path of Chapter 11 debtors and first  create a business entity in a favorable jurisdiction (usually only requiring a modest fee for incorporation),  then assigning debts and/or assets to that corporation and finally filing successive bankruptcies for the corporation and then themselves?  While certainly overkill,  particularly as many jurisdictions take a more permissive view to venue and none seem to salivate over the prospect of an additional  consumer case,  it is another thought experiment that might further show the discrepancy between Fake and Real People in Bankruptcy.   To read a copy of the transcript, please see: Blog comments Attachment Document false_venue_claims_signed_under_penalty_of_perjury_compressed.pdf (505.02 KB) Category Law Reviews & Studies