So, GM’s going to bankruptcy court–in the Southern District of New York. What’s that you say? GM is located in Michigan? Yes, that is true, but GM owns a car dealership in Harlem and has used it as a shoehorn to get the cases venued in SDNY. Some call this forum shopping. Others think maybe the GM lawyers just want a trip to the Big Apple now that the weather has turned fine. Me, I’m less interested in "why" GM is here, since it’s a fait accomplis, than I am in what this venue might mean for the case.
The SDNY bankruptcy bench has some pretty heavy hitters in the world of corporate and commercial law. Folks with major experience before joining the bankruptcy bench, not to mention those who developed really in depth expertise after joining the bench.
For example, Judge Adlai Hardin was a litigation partner at Milbank Tweed prior to joining the bench, with a practice focused on complex litigation of antitrust, securities and bankruptcy matters.
Judge Allan Gropper is an expert in international insolvency matters and co-authored a book on the subject.
Judge Martin Glenn was partner at O’Melveny & Meyers focusing on complex litigation of securities, RICO, unfair competition and and financial and accounting fraud. (conflict alert: Judge Glenn and I have served together on the Program Committee of the Federal Bar Council for years–even before he was a judge–and I think very highly of him.)
Judge Prudence Beatty is the author of two works on Bankruptcy — one has the incredibly sexy title The Doctrine of Equitable Subordination as Applied to Nonmangement Creditors — and she is a fellow of the American College of Bankruptcy and a Director of the American Bankruptcy Institute and an editor of its Journal.
I could go on and on, and my failure to mention here is not a negative reflection on the rest of the SDNY bankruptcy bench, but merely the realization that I have made my point with the examples above.
The GM bankruptcy is likely to be complex, will effect workers and creditors in many states and around the world and will require a level of sophistication that the SDNY bankruptcy bench is more than able to provide. Is it improper forum shopping to gain some advantage for incumbent management? Or, is it an acknowlegement that some jurisdictions have developed a level of sophistication and expertise in a given area that might be needed in a difficult case? After all, no one is surprised when corporate litigations are sited in Delaware, are they?