In Re Birchminster Corp. of California

6 B.R. 258, 1980 Bankr. LEXIS 4403, 6 Bankr. Ct. Dec. (CRR) 976
CourtUnited States Bankruptcy Court, E.D. Pennsylvania
DecidedSeptember 26, 1980
Docket19-10492
StatusPublished
Cited by20 cases

This text of 6 B.R. 258 (In Re Birchminster Corp. of California) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Birchminster Corp. of California, 6 B.R. 258, 1980 Bankr. LEXIS 4403, 6 Bankr. Ct. Dec. (CRR) 976 (Pa. 1980).

Opinion

OPINION

WILLIAM A. KING, Jr., Bankruptcy Judge.

The creditors’ "committee has filed the present motion seeking an order transferring venue in the case of Birchminster Corporation of California, d/b/a Central Valley Steel and Pipe Company, to the United States Bankruptcy Court for the Eastern District of California, at Fresno. Security Pacific National Bank, the major secured creditor in the case, supports and has joined in the motion. 1

On January 25, 1980, Birchminster Industries, Inc. filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Eastern District of Pennsylvania. Subsequently, on February 1, 1980, Birchminster’s wholly-owned subsidiary, Birchminster Corporation of California, trading as Central Valley Steel and Pipe, the present debtor, also filed a Chapter 11 petition with this Court. It is agreed that venue properly lay in the Eastern District of Pennsylvania under 28 U.S.C. § 1472 which states:

“[A] case under title 11 may be commenced in the bankruptcy court for a district-
* * * * * *
(2) in which there is pending a case under title 11 concerning such person’s affiliate ...”

The question presented for decision is whether, despite proper venue, the case should be transferred to the Eastern District of California. Because we find that transfer of this proceeding is in the interest of justice and for the convenience of the parties, the instant motion will be granted.

The question of the transfer of a case under Chapter 11 is governed by § 1475 of Title 28, United States Code. Section 1475 which concerns the change of venue of cases originally filed in either the proper or improper venue is not to be confused with § 1477 which only deals with transfer of *260 cases filed originally in the wrong district, 1 Collier on Bankruptcy, para. 3.02[4][a] at 3-196 (15th ed. 1979). In circumstances, such as this, where jurisdiction exists and venue is proper, § 1475 is applicable and provides:

A bankruptcy court may transfer a case under Title 11 or a proceeding arising under or relating to such a case to a bankruptcy court for another district, in the interest of justice and for the convenience of the parties.

Thus, the test for transferring a properly filed case is twofold: the interest of justice and the convenience of the parties. This standard under § 1475 is the same as it was under Bankruptcy Rule 116(b)(1) and the cases decided thereunder remain persuasive. Id., para. 3.02[4][d] at 3-202. In re Macon Uplands Venture, 2 B.R. 444 (Bkrtcy.D.Md.1980).

In general, the factors by which courts are prone to judge whether venue should be changed include: (1) proximity of creditors and the bankrupt to court; (2) proximity of witnesses necessary to the administration of the estate; (3) location of the assets; and (4) the economic and efficient administration of the estate. In re Bankers Trust, 403 F.2d 16, 23 (7th Cir. 1968); In re Button Co., 137 F. 668, 672-3 (D.Del.1904); In re Kerr’s, Inc., 253 F.Supp. 742 (S.D.N.Y.1966), aff’d 360 F.2d 163 (2nd Cir.1966); In re Macon Uplands Venture, supra, at 445.

The courts have also used the twofold tests of “convenience of parties” and “in the interest of justice” to give consideration to the following factors in connection with the transfer of a particular proceeding:

(1) the relative ease of access to sources of proof; (2) the availability of compulsory process for attendance of unwilling, and the cost of obtaining the attendance of willing witnesses; (3) the enforceability of judgment if one is obtained; (4) relative advantages and obstacles to a fair trial; (5) a local interest in having localized controversies decided at home; and (6) a trial in the state the laws of which will govern the action. In re Macon Uplands Venture, supra, 1 Collier on Bankruptcy, para. 3.02[4][b] at 3-200, 3-201 (15th ed. 1979 and cases cited [5] herein). These criteria are relevant under § 1475 and are to be applied on a case-by — case basis. The burden of establishing that the case should be transferred is on the moving party and must be shown by a fair preponderance of the evidence. United Button, supra at 673; In re Fairfield Puerto Rico, Inc., 333 F.Supp. 1187, 1189 (D.Del.1971); In re Macon Uplands Venture, supra.

The debtor argues that a change of venue violates the principle of “economy of administration” in that the transfer of the proceedings from Pennsylvania to California would entail dual administration, at great expense. While counsel’s point is well taken, this is merely one of the many considerations that must be weighed by the court.

In In re United Button Co., supra, the court stated:

What may be for the greatest convenience of parties in interest does not necessarily depend upon only one fact or circumstance entering into the situation. Proximity of the place of the bankrupt to the court entertaining the proceedings in bankruptcy, though a circumstance entitled to weight, is by no means conclusive, ... Proximity of a majority of the creditors of the bankrupt in number or amount of their claims is a circumstance which should also be duly weighed.
Id., at 672

The first factor to be considered is the proximity of creditors to the court. Counsel for the moving party, by failing to introduce into evidence either the claims docket or the relevant schedules has limited the court’s inquiry into this factor. In their memorandum of law, counsel has attempted to establish the various percentages of creditors found in the judicial districts. This court may consider only the evidence presented at the trial, not other evidence which may have been in the files of the administration proceeding. In re Aughenbaugh, 125 F.2d 887 (3rd Cir. 1942); In re *261 Stridacchio, 107 F.Supp. 486 (D.N.J.1952). See also In re Crown Sportswear, Inc., 575 F.2d 991 (1st Cir. 1978). The Aughenbaugh court stated:

To hold otherwise would be to violate the fundamental concept of procedural due process that a party to litigation is entitled to have the evidence relied on by his opponent presented at the hearing of his case so that he may have opportunity to cross-examine his opponent’s witnesses and to offer evidence in rebuttal. As the Supreme Court said in Interstate Commerce Commission v. Louisville & Nashville R. Co.,

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6 B.R. 258, 1980 Bankr. LEXIS 4403, 6 Bankr. Ct. Dec. (CRR) 976, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-birchminster-corp-of-california-paeb-1980.