Senators Coons, Carper introduce bipartisan legislation to avert potential Delaware bankruptcy judgeship crisis

WASHINGTON – Attempting to head off a potential crisis in America’s bankruptcy court system, U.S. Senators Chris Coons and Tom Carper (both D-Del.) today introduced legislation that would extend 30 temporary bankruptcy judgeships in 14 states and Puerto Rico, including five in Delaware, to ensure that those key positions do not become vacant. More than one-third of the nation’s largest bankruptcies are handled in Delaware’s bankruptcy courts, which play an important role in Delaware’s economy.

Faced with increasing demand on the federal court system, Congress has created dozens of temporary bankruptcy judgeships over the last 20 years to help the courts keep pace. The Temporary Bankruptcy Judgeships Extension Act of 2011 heeds the recommendations made earlier this year by the non-partisan Judicial Conference of the United States, whose biennial review urged Congress to prevent the expiration of the 30 temporary bankruptcy judgeships covered by this bill by extending each by five years. The statutory authorization to fill these judgeships, should they be vacated, has already lapsed.

“For many, economic recovery depends on bankruptcy courts that have the capacity to fairly and expeditiously resolve personal and corporate bankruptcies,” Senator Coons said. “Talented bankruptcy judges can help turn a likely economic loss into a successful reorganization that protects jobs and creditors. If these judgeships are allowed to expire, our courts will become overwhelmed at the expense of jobs, creditors, and our nation’s economy. Our bankruptcy courts also support a significant number of jobs in Delaware’s legal community and a host of supporting industries, making preserving these judgeships an economic imperative,” Senator Coons is a member of the Senate Judiciary Committee.

“In order to survive and thrive in this challenging economic climate, businesses need more certainty, not less,” Senator Carper said. “To that end, businesses need a regulatory and legal environment that operates efficiently and effectively. To create that environment, it is imperative that we have an adequate number of judgeships to maintain a fair and efficient process to handle the workload of Chapter 11 cases. Letting bankruptcy judgeships in Delaware and in other states expire would not be in the interest of our legal or business communities and would negatively impact our broader economy. The last thing we need to do at this moment is to disrupt the legal systems and institutions that businesses — large and small — depend on to adapt to shifting economic conditions.”

The bill is co-sponsored by Senators Johnny Isakson (R-Ga.), Richard Burr (R-N.C.), Lindsay Graham (R-S.C.), Kay Hagan (D-N.C.), Lamar Alexander (R-Tenn.), and Dean Heller (R-Nev.).

Twenty districts in 14 states, plus Puerto Rico, currently have temporary judgeships that would be extended by this bill, including:

• The central district of California: 3 judgeships

• The eastern district of California: 1 judgeship

• The district of Delaware: 5 judgeships

• The southern district of Florida: 2 judgeship

• The southern district of Georgia: 1 judgeship

• The district of Maryland: 3 judgeships

• The eastern district of Michigan: 1 judgeship

• The northern district of New York: 1 judgeship

• The southern district of New York: 1 judgeship

• The eastern district of North Carolina: 1 judgeship

• The middle district of North Carolina: 1 judgeship

• The eastern district of Pennsylvania: 1 judgeship

• The western district of Pennsylvania: 1 judgeship

• The district of Puerto Rico: 2 judgeships

• The eastern district of Tennessee: 1 judgeship

• The western district of Tennessee: 1 judgeship

• The district of Nevada: 1 judgeship

• The district of New Jersey: 1 judgeship

• The district of South Carolina: 1 judgeship

• The eastern district of Virginia: 1 judgeship

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