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109. A debtor even more may submit its petition in any place where it is domiciled (i.e. incorporated), where its principal place of company in the United States lies, where its principal properties in the United States lie, or in any location where any of its affiliates can file. See 28 U.S.C.Proposed changes to the place requirements in the US Insolvency Code might threaten the United States Bankruptcy Courts' command of international restructurings, and do so at a time when a number of the US' perceived competitive advantages are decreasing. Specifically, on June 28, 2021, H.R. 4193 was presented with the purpose of amending the location statute and modifying these location requirements.

Both propose to eliminate the ability to "online forum shop" by excluding a debtor's place of incorporation from the place analysis, andalarming to international debtorsexcluding cash or cash equivalents from the "primary possessions" equation. Additionally, any equity interest in an affiliate will be considered located in the same area as the principal.

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Usually, this testimony has actually been concentrated on questionable 3rd party release provisions executed in recent mass tort cases such as Purdue Pharma, Young Boy Scouts of America, and many Catholic diocese insolvencies. These arrangements frequently require creditors to release non-debtor third celebrations as part of the debtor's plan of reorganization, even though such releases are probably not allowed, at least in some circuits, by the Insolvency Code.

In effort to stamp out this habits, the proposed legislation claims to limit "online forum shopping" by prohibiting entities from filing in any location other than where their corporate head office or primary physical assetsexcluding cash and equity interestsare situated. Ostensibly, these costs would promote the filing of Chapter 11 cases in other US districts, and steer cases far from the favored courts in New york city, Delaware and Texas.

Despite their admirable function, these proposed amendments could have unanticipated and potentially adverse effects when viewed from a global restructuring potential. While congressional testament and other analysts assume that location reform would simply make sure that domestic companies would file in a different jurisdiction within the US, it is an unique possibility that international debtors may hand down the US Insolvency Courts completely.

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Without the consideration of money accounts as an opportunity toward eligibility, numerous foreign corporations without concrete assets in the United States may not certify to file a Chapter 11 personal bankruptcy in any US jurisdiction. Second, even if they do qualify, worldwide debtors might not be able to count on access to the usual and convenient reorganization friendly jurisdictions.

Provided the complex concerns often at play in an international restructuring case, this might trigger the debtor and creditors some unpredictability. This uncertainty, in turn, may encourage global debtors to file in their own countries, or in other more helpful countries, instead. Especially, this proposed location reform comes at a time when many countries are emulating 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 reorganize and maintain the entity as a going concern. Hence, financial obligation restructuring arrangements may be approved with as low as 30 percent approval from the total debt. Unlike the United States, Italy's new Code will not include an automated stay of enforcement actions by lenders.

In February of 2021, a Canadian court extended the country's approval of 3rd party release arrangements. In Canada, businesses usually rearrange under the conventional insolvency statutes of the Business' Financial Institutions Plan Act (). 3rd celebration releases under the CCAAwhile fiercely contested in the USare a typical aspect of restructuring plans.

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The current court decision makes clear, though, that regardless of the CBCA's more minimal nature, 3rd celebration release provisions may still be appropriate. Companies might still get themselves of a less cumbersome restructuring readily available under the CBCA, while still receiving the benefits of third celebration releases. Effective since January 1, 2021, the Dutch Act Upon Court Verification of Extrajudicial Restructuring Plans has actually created a debtor-in-possession treatment conducted beyond official bankruptcy procedures.

Effective as of January 1, 2021, Germany's new Act upon the Stabilization and Restructuring Structure for Businesses offers pre-insolvency restructuring procedures. Prior to its enactment, German business had no alternative to restructure their financial obligations through the courts. Now, distressed business can hire German courts to reorganize their financial obligations and otherwise maintain the going issue value of their business by utilizing a number of the same tools readily available in the US, such as maintaining control of their organization, enforcing cram down restructuring plans, and implementing collection moratoriums.

Motivated by Chapter 11 of the US Personal Bankruptcy Code, this new structure simplifies the debtor-in-possession restructuring process mostly in effort to assist little and medium sized businesses. While previous law was long criticized as too costly and too intricate because of its "one size fits all" approach, this brand-new legislation integrates the debtor in ownership model, and attends to a structured liquidation process when necessary In June 2020, the UK enacted the Corporate Insolvency and Governance Act of 2020 ().

Significantly, CIGA attends to a collection moratorium, invalidates certain provisions of pre-insolvency contracts, and permits entities to propose a plan with investors and creditors, all of which permits the development of a cram-down plan comparable to what may be achieved under Chapter 11 of the US Insolvency Code. In 2017, Singapore adopted enacted the Companies (Change) Act 2017 (Singapore), which made significant legal changes to the restructuring provisions of the Singapore Companies Act (Cap 50) 2006.

As an outcome, the law has considerably enhanced the restructuring tools offered in Singapore courts and propelled Singapore as a leading hub for insolvency in the Asia-Pacific. In Might of 2016, India enacted the Insolvency and Personal Bankruptcy Code, which entirely overhauled the insolvency laws in India. This legislation looks for to incentivize further investment in the nation by providing higher certainty and efficiency to the restructuring procedure.

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Provided these recent changes, international debtors now have more options than ever. Even without the proposed limitations on eligibility, foreign entities might less need to flock to the US as previously. Further, ought to the United States' location laws be modified to prevent simple filings in particular convenient and advantageous locations, global debtors may begin to consider other locations.

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

Consumer bankruptcy filings increased 9% in January 2026 compared to January 2025, with 44,282 consumer filings that month alone. Commercial filings jumped 49% year-over-year the highest January level since 2018. The numbers show what debt experts call "slow-burn financial strain" that's been building for years. If you're having a hard time, you're not an outlier.

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Customer bankruptcy filings amounted to 44,282 in January 2026, up 9% from January 2025. Commercial filings struck 1,378 a 49% year-over-year dive and the highest January industrial filing level considering that 2018. For all of 2025, customer filings grew almost 14%.