Anna Nicole Smith Goes Shopping: The New Forum-Shopping Problem in Bankruptcy

In the United States, relations between debtors and their creditors are governed by two distinct legal regimes. For the overwhelming majority of credit relationships, state law of contract, property, tort, and consumer protection set up the framework within which the debtor-creditor relationship is established, functions, and in the end, is dissolved. In a smaller but significant number of these relationships, a different forum orchestrates the end of these relationships, namely, federal bankruptcy court. These two distinct forums for debtor-creditor relations coexist side by side, with some disputes moving over time from one forum to the other.

As with any system where dual regimes for dispute resolution exist, parties seeking resolution of debtor-creditor disputes can and will, under the right conditions, engage in “forum shopping.”