Opinion
No. 78-953EG
September 29, 1978
Bankruptcy Rules of Procedure — Transfer of Cases — Improper Venue
Transfer of a bankruptcy case to another district was proper where the alleged bankrupt's plant, inventory, books, records, and virtually all of its employees were located in the transferee district.
The issue was one of venue. An involuntary petition had been filed seeking to have the company adjudicated bankrupt. The alleged bankrupt moved to transfer the case to the Southern District of California. The evidence showed that the alleged bankrupt's plant, building, and inventory had, since 1971 (with the exception of a period in 1975), been located in the transferee district. For a time in 1975, the executive offices of the company had been moved to the transferor district. However, in October of 1975, the executive offices, together with all corporate books and records, were removed to the transferee district. Only the sales office remained in the transferor district. The court concluded that venue in the transferor district was improper, since the alleged bankrupt's plant, inventory, books, records, and virtually all of its employees were located in the transferee district.
Bankruptcy Rule 116(b)(2) addresses itself to cases where venue is improper. It provides, in pertinent part, that if a petition is filed in a wrong district the court may "dismiss the case or, in the interests of justice and for the convenience of the parties, retain the case or transfer it to any other district. . .". While it could have moved that the case be dismissed, the company in fact moved that the case be transferred to the district of proper venue. Thus, the court ordered that the case be transferred to the bankruptcy court for the Southern District of California. See Bankruptcy Rule 116 at ¶ 20,017.