In re: Visteon Corporation (Visteon Corporation v. Governor Business Solutions, Inc.), Adv. Case No. 11-52073 (CSS) (Bankr. D. Del. Oct. 21, 2011).Read opinion here.

Issue Addressed

Whether an action to recover preferences and fraudulent transfers should be dismissed for improper venue or, alternatively, transferred to the Eastern District of Michigan?

Short Answer: Motion denied; factors favored keeping venue in Delaware.

Tara Lattomus of Eckert Seamans prepared this summary.


Visteon and certain affiliates filed for bankruptcy protection in 2009. In May, 2011, Visteon filed a complaint against Governor Business Solutions, Inc. (“GBSI”) to recover alleged preferential and fraudulent transfers under the Bankruptcy Code. GBSI filed a motion to dismiss for improper venue or, in the alternative, requesting a change of venue to the Eastern District of Michigan where the underlying transactions giving rise to the action took place.

Legal Analysis

The Bankruptcy Court began its analysis by recognizing the strong presumption in favor of maintaining the action in the jurisdiction in which it was commenced. The Court also recognized that Courts usually defer to the plaintiff’s choice of venue unless it is legally improper. Finding nothing legally improper, the Court then undertook a twelve factor analysis in order to determine whether to retain the action in Delaware. The factors considered by the Court included: (1) the plaintiff’s choice of forum; (2) the defendant’s choice; (3) where the claim arose; (4) location of books and records; (5) convenience of the parties; (6) convenience of the witnesses; (7) enforceability of a Delaware judgment; (8) the practical considerations of trial; (9) administrative difficulty or lack thereof; (10) public policies of both forums; (11) familiarity of the judge with applicable state law; and (12) local interest.

Judge Sontchi found only one factor in favor of transfer; GBSI’s choice of forum. That the underlying transactions took place in Michigan was found to be a neutral factor because GBSI made no showing that the location of the transactions was germane to the venue determination. The dispute involved basic contract interpretation that either court was capable of undertaking. Conversely, the Court found seven factors in favor of keeping the matter in Delaware. The location of books and records was found to favor Delaware because there was no showing that the action involved a large amount of documents or that the records were unavailable in electronic format. The convenience of the witnesses was found to favor Delaware because there was no indication that any witnesses would be unavailable for a trial in Delaware. There was also no evidence that Michigan would refuse to recognize a Delaware judgment. Furthermore, trial was found to be more practical in Delaware because the Court was already familiar with the underlying bankruptcy proceeding and was simultaneously adjudicating multiple other preference actions. Public policy favors centralizing bankruptcy matters in one court and Delaware has a local interest in retaining the recovery for administration in the underlying bankruptcy case. Along with the plaintiff’s choice of venue, the factors heavily favored keeping the action in Delaware. Accordingly, the motion to transfer venue was denied.