[caption id="attachment_225765" align="aligncenter" width="1024"] Chapter 11 filings in the Delaware Bankruptcy Court fell to 380 in 202, but Delaware remained the busiest court for "Mega" Chapter 11 cases with 32. | DBT PHOTO BY MIKE ROCHELEAU[/caption] WILMINGTON – When America’s corporate giants look to reorganize their debts or sue a competitor over the use of a patented product, their lawyers often end up in Delaware. The state’s U.S. Bankruptcy Court and District Court located in downtown Wilmington continue to rank among the busiest in the nation, handling scores of headline cases. Last year, Delaware remained home to the most so-called Mega Chapter 11 bankruptcy cases that involve more than $100 million in assets and 1,000 or more creditors, with 32 such cases. And through the first half of 2023, it continued to outpace competing courts like the Southern District of New York and Southern District of Texas that typically see double-digit cases too. Matching a national trend, Chapter 11 filings here fell last year to 380 from 524 in 2021, while Chapter 7 filings also fell from 808 to 617. As rising inflation has pushed interest rates higher and supply chain woes just begin to ease, however, filings have picked up in 2023. Delaware has been home to major bankruptcy cases like cryptocurrency exchange FTX, trucking company Yellow Corp. and electric vehicle startup Lordstown Motors. Similarly, patent litigation filed in the U.S. District Court of Delaware fell from 890 in 2021 to 685 last year, but the local courts still ranked second in the nation amid a slowdown in such cases. It remained the preferred venue for pharmaceutical cases, with 63% of all patent cases under the Hatch-Waxman Amendment filed here last year. The patent court was headlined by a $333 million decision in favor of DNA sequencing company Complete Genomics versus California biotech company Illumina. But Delaware’s status as a go-to venue for businesses cases also continues to exacerbate its caseload, where the weighted average of 1,979 cases per bankruptcy judge ranks the second highest in the nation and 775 cases per district judge ranked fourth overall. The bankruptcy court on Market Street was aided by the addition of Judge Thomas Horan in March, bringing the judicial bench back to a full complement of eight, while District Court on King Street added Judge Gregory Williams while boasting 24 visiting judges to help too. For Lawrence Ponoroff, a law professor at Wilmington University who has a long career in corporate and bankruptcy law, the status of incorporation capital of the United States, the quality of the state judiciary and the history of significant fee applications here helps to keep Delaware at the top of the legal community’s venues of choice. “I don't think there's a bankruptcy bench anywhere in the country that is as sophisticated in managing Chapter 11 cases as the Delaware bankruptcy judges,” he said. “These cases are complicated. There's a lot of moving pieces, and having a judge overseeing the case, who is able and experienced in dealing with these types of reorganizations, is a real plus.” While there remains a lingering threat of congressional action that could upset the status quo of Delaware’s hold on much of corporate law, Ponoroff doesn’t believe a change is imminent. The Bankruptcy Venue Reform Act (BVRA) has been proposed for more than a decade, but was reintroduced in 2021, and seeks to disallow places of incorporation as a venue for bankruptcy filings. The bill sponsors argue that allowing companies to file in places like Delaware or New York, despite having no physical presence there, puts locals, employees and creditors at a disadvantage in the hearings that are sometimes across the country. In 2018, when the latest version of the BVRA was first introduced, Gov. John Carney and Delaware’s congressional delegation loudly opposed the proposal. “Our economy thrives when the bankruptcy system is fair, predictable, and efficient. Experienced bankruptcy judges are critical to ensuring that companies can restructure in a way that saves jobs and preserves value,” they said in a statement. Ponoroff said that while the arguments for venue reform have merit, the reality is that the status quo has created a judicial bench and local bar that is adept at arguing and understanding the often complex million- or billion-dollar bankruptcy cases heard here. “If lots of cases are steered away, they're going to go places where there's going to be a much steeper learning curve,” he said. “It’s sort of worked out this way and as a consequence of that, you'd be dismantling a structure that has been a lot of years in the making.”