SONTCHI, Judge.
Before the Court is a motion filed by defendant Governor Business Solutions, Inc. ("GBSI") to dismiss an avoidance action for improper venue or, in the alternative, to transfer venue of the action to the Eastern District of Michigan. The Court will deny the motion to dismiss because section 1409 of Title 28 expressly allows a debtor to file an avoidance action in the district in which its bankruptcy case is pending. In addition, applying the 12 factor test established by the Third Circuit, the Court will deny the motion to transfer venue.
In 2009, Visteon and its affiliates filed bankruptcy under Chapter 11. In May 2011, Visteon filed a complaint against GBSI, seeking to avoid and recover certain transfers as preferences under section 547 of the Bankruptcy Code. Visteon also alleges that the transfers were fraudulent and are avoidable under sections 544(b)(1) and 548(a)(1) of the Code. Finally, Visteon argues that it is entitled to recover the avoided transfers under section 550(a) of the Bankruptcy Code. GBSI responded to the complaint by filing a motion to dismiss for improper venue or for change of venue to the Eastern District of Michigan.
"[A] proceeding arising under title 11 or arising in or related to a case under title 11 may be commenced in the district court in which such case is pending."
There is a strong presumption that favors maintaining the action in the same district where the main bankruptcy case is pending.
Third Circuit case law requires the Court to apply a twelve-factor test in determining whether to grant a motion to transfer venue.
Visteon has chosen to pursue its avoidance actions in this forum. Courts generally defer to the plaintiff's decision of venue if it is legally proper. As there is nothing legally improper about the plaintiff's decision to pursue its avoidance actions in this forum.
GBSI prefers the Eastern District of Michigan. Thus, the second factor obviously favors transferring the action to that Court.
GBSI contends that the claim arose in Michigan. Visteon does not dispute this and concedes that its claims are based on transactions that occurred outside of Delaware. Nonetheless this Court has held that "where the issue will be resolved through basic contractual interpretation and the location of the underlying events is not germane, this factor is neutral."
Visteon argues that this dispute requires only basic contract interpretation and a reconciliation of the parties documents.
Although Visteon concedes that this claim arose elsewhere, GBSI has failed to show that the location of the underlying events may be germane to this Court's venue analysis. Rather, GBSI only mentions that some of Visteon's counsel can be found in Michigan, which is not significant. Thus, this factor does not favor either party.
Because of the "ease of transporting [paper and electronic] documents" when discovery is "largely limited to `paper exchanges'" the physical location of books and records is frequently considered a "neutral" factor.
The number of transactions (125) and the subjective qualitative statement ("significant paperwork") provide too vague a description and evidence too little difficulty to create concern. This is especially true given the increasing ease of transporting physical and electronic documents. As a result, this factor favors keeping the action in Delaware.
The fifth factor is the convenience of the parties as "indicated by their relative physical and financial condition."
GBSI has failed to show any concrete evidence that it would be less expensive overall to litigate outside of Delaware.
This factor is only relevant to the extent that GBSI shows that witnesses are "actually unavailable for trial in Delaware."
GBSI has not objected to personal jurisdiction and has not provided any reason why a judgment from this Court would not be given full faith and credit in the State of Michigan. Therefore, this factor favors keeping the action in Delaware.
As this Court has stated, "[m]aintaining this adversary proceeding in the same venue as the bankruptcy case would provide a more economical use of judicial resources than transferring this adversary proceeding . . . because the Court is already familiar with the facts underlying the bankruptcy case. Further the Trustee is involved in multiple other preference actions pending in Delaware, thereby minimizing the cost of litigation."
GBSI concedes that this factor does not weigh in favor of either party, stating that "[t]he trial issues appear to be equal as to the relative administration in each District."
Transferring this adversary proceeding to Michigan would harm the public policy of centralizing bankruptcy matters and maximizing the recovery of creditors.
GBSI concedes that this factor does not favor transferring venue as state law is not implicated in this matter.
GBSI argues that Michigan has a strong local interest in this proceeding as Visteon is "considered a local company to Michigan." However, it is unlikely that the Michigan courts have an interest in the turnover of money to Visteon's estate.
Seven factors favor maintaining this action in Delaware and one favors transferring the action to Michigan. The remaining four are neutral. Clearly the weight of the facts and law favor retaining this action in Delaware. In addition, recall that "deference is given to the plaintiff's choice of forum."
Venue in this Court is proper. A plaintiff's choice of venue should only be disturbed when the balance weighs heavily in favor of the defendant's motion to transfer. GBSI has failed to show that a transfer of venue is warranted. For the foregoing reasons, the Court will deny the motion to dismiss for improper venue and deny the request for transfer of venue to the Eastern District of Michigan. An order will be issued.