By now, most of you have read a number of stories about the Chapter 11 filing on Sept. 18 by Toys R Us. Toys R Us is the third largest retailer to ever file for Chapter 11 protection. Its headquarters are, and have been for many years, located in Wayne, New Jersey. What none of the stories have focused on is why a New Jersey based company filed its Chapter 11 petition in the Eastern District of Virginia. Why indeed?
The venue provisions for bankruptcy cases are contained in 28 U.S.C. 1408. That section provides that a bankruptcy case may be commenced in the district court for the district:
(i) In which the domicile, residence, principal place of business in the United States or principal assets in the United States of the person or entity that is the subject of such case, have been located for the 180 days immediately preceding such commencement ….; or
(2) In which there is a pending case under Title 11 concerning such persons affiliate, general partner or partnership.
