Celadon Bankruptcy Filed in Delaware?
Celadon is an Indianapolis-based company. The primary operations were in Indianapolis. The employees were hit hardest in Indianapolis. Even their address on the bankruptcy petition is in Indianapolis. Why then was Celadon’s Chapter 11 bankruptcy filing in Delaware?
Celadon is a “Delaware” Corporation
Companies frequently incorporate in Delaware to take advantage of Delaware’s generous law for corporations. Celadon was one of many such “Delaware” corporations. As long as there are sufficient ties to Delaware and all paperwork is properly filed, then any multi-state company can operate as a “Delaware” corporation.
Delaware offers generous laws as to taxation and personal liability of company owners. This can be a huge boom for both companies, investors, and even employees. If the corporation is not over-taxed or in too much legal danger, then operations can be more stable, bold, or expansive. Companies are given more freedom to expand and provide jobs. Of course, there are also potential downsides to these corporate “freedoms” such as loss of taxes or corporate shielding. However, the overall benefit to society (and the state itself) has swayed states like Delaware and Nevada to offer liberal, freedom-focused corporate laws.
Delaware Corporations are Open to Delaware Bankruptcy Jurisdiction
Celadon also has the ability to file bankruptcy in the jurisdiction of Delaware. The Chapter 11 bankruptcy case was actually filed in Wilmington, Delaware. It is currently under the supervision of Judge Karen Owens. However, this is not necessarily a disadvantage to any of Celadon’s creditors or employees. There is only one bankruptcy district in Delaware. It also has heavy experience with frequent Chapter 11 cases.
Although the Indianapolis bankruptcy judges have exceptional experience with their own Chapter 11 cases, the frequency of Chapter 11 cases in Delaware creates a direct, easy, and open venue for all rights in Chapter 11. Delaware judges also oversee maximum repayment to creditors and especially employees with zeal to protect the Chapter 11 system.
