Page 8 - Delaware Lawyer - Winter 2022

FEATURE
to Leading Authority
Laura Davis Jones
From ‘Backwater’
The evolution ofDelaware’s bankruptcy court
Delaware’s evolution into a bankruptcy powerhouse has its roots in the state’s longstanding presence as the corporate capital of America. Delaware continues to be a commonly favored venue for large and mid-market companies and entities seeking a consistent and sophisticated jurisdiction to file a bankruptcy case.
Many debtors have the Delaware Bankruptcy Court as an avail- able venue option because they
can file bankruptcy in any jurisdiction where one of their debtor affiliates is incorporated or where it has a princi- pal place of business or principal as- set. Delaware has a long history as the state of incorporation of choice and remains popular because of, among other factors, Delaware’s innovations in alternative entities such as limited liability companies.
Once viewed as a stagnant judi-
cial “backwater” by some early com- mentators, the Delaware Bankruptcy Court system has developed and maintained a longstanding national reputation for being an effective, ef- ficient, experienced and consistent court system, earned over the course of 40+ years since the passage of the Bankruptcy Code.
Development of the Bankruptcy Court System
Prior to the enactment of the Bankruptcy Reform Act of 1978 (also
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