The U.S. Department of Justice’s bankruptcy unit recently reiterated its allegations of venue shopping against pharmaceutical company Sorrento Therapeutics Inc. In an unprecedented move, Sorrento Therapeutics is arguing its recent Houston bankruptcy filing, bolstered by the use of a recently established P.O. Box and bank account.
Sorrento’s actions have induced a hefty critique from the DOJ bankruptcy unit, branding the company’s method of venue selection for its Chapter 11 case as an abuse of the process. In its filing last Thursday, the department challenged the company’s use of an only days-old P.O Box number and bank account to justify its filing in Houston.
This development feeds into the larger debate about the way bankrupt corporations are choosing venues for their Chapter 11 cases. This topic has recently fueled critical discourse in the field of bankruptcy law. In defense of its actions, Sorrento justifies its Houston filing by confirming its steps to establish a valid presence there. The firm’s claims will soon be examined in a hearing set for Monday in Houston.
The DOJ accusses Sorrento of resorting to what they see as unusual and concerning lengths to manipulate the bankruptcy venue to suit its own convenience. This latest event involving Sorrento exemplifies a case that pushes the limits of venue slelection and manipulation, raising significant questions in the field of bankruptcy law.
For a more comprehensive coverage of this topic, see Bloomberg’s original report here.