Bankruptcy lawyers in Philadelphia predict that the current economic crisis will inevitably lead to an increase in Chapter 11 filings by struggling businesses but that the lion’s share of those cases are likely to be litigated in the bankruptcy courts in Delaware and the Southern District of New York, with only a handful of sizeable cases ending up in the Eastern District of Pennsylvania.
Some lawyers say there’s a Catch-22 at work that prevents the Eastern District from ever attaining the prominence of the Delaware and New York courts. Since the Eastern District doesn’t have a track record for handling big Chapter 11s, it is rarely the forum of choice for those cases and the court, therefore, cannot develop the reputation it would need to be chosen for big cases in the future.
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