Multi-Color Venue ‘Loophole’ Allowed by Congress, Judge Says

Multi-Color Corp.’s Chapter 11 case will remain in New Jersey, a judge has ruled, saying the firm took advantage of relaxed venue rules permitted by Congress.

Judge Michael Kaplan said Monday that the Atlanta-based label maker satisfied the bankruptcy code’s “deliberately broad” venue statute by depositing $1 million into newly created New Jersey bank accounts 16 days before filing Chapter 11 on Jan. 29. Rival lenders opposing the restructuring argued the case should be dismissed or moved to a different bankruptcy court closer to the firm’s headquarters.

The ruling keeps Multi-Color on track to exit Chapter 11 relatively quickly ...