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Bankruptcy Venues: An Excerpt from Trends in Large Corporate Bankruptcy and Financial Distress

Consistent with prior years, the most common venue for bankruptcy filings was Delaware with 49 of the 138 bankruptcy filings by companies with over $100 million in assets in the first three quarters of 2020.

For the first time since 2005, the Southern District of Texas accounted for more than 25 percent of bankruptcies filed by companies with over $100 million in assets so far this year. Of the 41 bankruptcies filed in the Southern District of Texas in Q1–Q3 2020, 28 were by companies in the Mining, Oil, and Gas industry.

The third most common venue for bankruptcy filings by companies with over $100 million in assets in Q1–Q3 2020 was the Southern District of New York with 21 filings. Unlike Delaware and the Southern District of Texas, filings in the Southern District of New York were roughly in line with prior years.

These top three courts (Delaware, Southern District of Texas, and Southern District of New York) account for 111 of the 138 bankruptcies (80 percent) of companies with over $100 million in assets in the first three quarters of 2020.

The Bankruptcy & COVID-19 Working Group, formed by a group of bankruptcy scholars, warned in May 2020 that the flood of bankruptcies triggered by COVID-19 may overwhelm the court system.

80% Percentage of bankruptcies filed in the top three courts in Q1–Q3 2020

Figure 6: Heat Map of Bankruptcies by Venue 2005–Q3 2020

Heat Map of Bankruptcies by Venue

Source: BankruptcyData

Note: Only Chapter 11 and Chapter 7 bankruptcy filings by companies (both public and private) with over $100 million in reported assets are included. “Other” includes courts with fewer than five bankruptcies in all years during the time period. 2020 includes January 1, 2020, through September 30, 2020.

 

Copyright ©2021 Cornerstone ResearchNational Law Review, Volume X, Number 318
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About this Author

Allie Schwartz Financial Attorney Cornerstone Research New York, NY
Principal

Allie Schwartz specializes in the valuation of securities and financial derivatives in the context of securities litigation, bankruptcy, and regulatory disputes. She also works extensively on issues affecting financial institutions, such as addressing allegations of anticompetitive behavior, insider and disruptive trading, hedging and risk management, and issues in consumer finance.

Dr. Schwartz has more than a decade of experience supporting experts through multiple stages of litigation, such as deposition, domestic and international arbitration, and trial. She has also provided...

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JB Doyle Cornerstone Securities Analysis
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J.B. Doyle consults on litigation and regulatory matters related to financial institutions and securities. In these areas, he has extensive experience with advanced statistical modeling and large datasets. Dr. Doyle has presented to regulators, and works with clients in all stages of commercial litigation, including class certification, affirmative and rebuttal reports, depositions, arbitration, and trial.

Dr. Doyle’s recent case topics and experience include:

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