The realities of the bankruptcy venue provisions require potential debtors and their advisers to prudently weigh the legal significance of a bankruptcy filing in various courts. In a recent decision, U.S. Bankruptcy Judge Kevin Gross of the District of Delaware reviewed the Bankruptcy Code’s venue provisions and considered the various interests of a bankruptcy estate’s stakeholders when he transferred a “first-filed” bankruptcy petition from Delaware’s bankruptcy court to the court’s counterpart in the Northern District of Illinois, in In re Caesars Entertainment Operating (Bankr. D. Del. Feb. 2, 2015).

On Jan. 15, Caesars Entertainment Operating Co. Inc. made a strategic decision to file its bankruptcy proceedings in the U.S. Bankruptcy Court for the Northern District of Illinois on the heels of a Jan. 7 involuntary bankruptcy petition filed in Delaware’s bankruptcy court by a group of second lien noteholders. Following a hearing on the petitioning creditors’ motion seeking a determination under Federal Rule of Bankruptcy Procedure 1014(b) as to proper venue, Gross ruled that the venue provisions of the Bankruptcy Code under the circumstances supported the transfer of the Delaware case to the Illinois bankruptcy court because it was in the “interest of justice” to do so.