Right now, companies can file for bankruptcy in almost any court across the country—they can choose the state where they're incorporated, where their main office is located, where their biggest assets are, or even where a related company already has a bankruptcy case. This has created a problem called "forum shopping," where big companies strategically file bankruptcy in courts far from where they actually do business, often in just a handful of popular bankruptcy courts. This practice makes it harder for local employees, small creditors, and community members to participate in cases that directly affect their lives and livelihoods.

This bill fixes that by requiring companies to file bankruptcy in the district where they actually have their principal place of business or main assets—and they have to have been there for at least 180 days before filing. For publicly traded companies, the law uses their official headquarters address from their most recent annual report to the SEC. The bill closes loopholes by saying companies can't move their headquarters or assets to a different district just to change where they can file bankruptcy. If a company tries to file in the wrong court anyway, that court must immediately dismiss the case or transfer it to the correct district. The only exception is if a related company already has a properly filed bankruptcy case in another district, in which case the new case can be filed there too.