The Real Effects of Bankruptcy Forum Shopping

January 20, 2026, Opinion: "Many firms file for Chapter 11 bankruptcy in a court located outside of the state in which they are headquartered. Roughly half of these “forum-shopped” bankruptcies are filed in the Delaware bankruptcy court. For decades, policy makers and academics have debated whether this Delaware forum shopping is a positive or negative feature of bankruptcy. Critics argue that forum shopping reflects corrupt court incentives to attract cases. Six congressional bill proposals have sought to limit forum shopping. Several of these bills are predicated on the idea that forum shopping is harmful for employees, who cannot represent themselves in a distant court. On the other side of the debate, proponents argue that forum shopping is beneficial because Delaware judges have expertise in handling difficult bankruptcies."