The ‘city of big shoulders’ has become the ‘city of big bankruptcy cases’. Kmart; Dade Behring; United Airlines; and most recently, Conseco. All high profile filings. All filed in Chicago’s bankruptcy court. In fact, official records indicate that the US Bankruptcy Court for the Northern District of Illinois was the second busiest bankruptcy court in the country last year. In addition, the Chicago-based bankruptcy venue ranked fourth nationwide in terms of Chapter 11 reorganisation cases, according to Bankruptcy Court Decisions’ Weekly News & Comment, even though it did not crack the top 10 in that bellwether category only a year ago.
This apparent shift of complex Chapter 11 cases from East Coast venues to Chicago – especially for those involving Midwest companies – is no coincidence. In recent years, the traditionally popular bankruptcy courts in New York and Delaware increasingly became swamped with Chapter 11 filings and it became harder for debtors’ counsel to get the critical court time needed to address the problems faced by their clients in a timely fashion – and while they were still viable entities. When these debtors’ lawyers began to look around for alternative venues, they soon began to notice that the bankruptcy judges sitting in Chicago could do the job very well indeed.
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