Judge Kaplan’s comments were originally made last week to a recently formed Rules Committee that included members of prominent law firms like Kirkland & Ellis and Weil Gotshal. The committee was formed as part of a general order issued in January signaling the beginning of a review to recommend changes to the Chapter 11 rules and procedures in New Jersey.

New Jersey has become a destination for more mega-bankruptcies recently, coinciding with a scandal-plagued transition happening in the US Bankruptcy Court for the Southern District of Texas, where the majority of mega-cases had been filed in recent years.

Industry participants had started to wonder whether or not New Jersey was looking to do what Texas did and create a limited panel for complex cases.

Kaplan told the rules committee last week: “...our District’s chapter 11 practice rules, including those for complex cases, have not been updated since I went on the bench, seventeen years ago. We are long overdue, and since we have the opportunity now to make needed changes and improvements, we are looking for insight from all practitioners, representing all constituencies in chapter 11 cases.”

Kaplan’s comments were made public today following an open letter from some advocates for random assignment. The group decided to reach out to the New Jersey chief judge today in response to that rules committee formation and general order.

The group comprised six law professors — George Kuney of The University of Tennessee; Adam Levitin of Georgetown University; Stephen Lubben of Seton Hall University; Robert Miller of University of South Dakota; Samir Parikh of Wake Forest; Nancy Rapoport of the University of Nevada, Las Vegas — as well as the former director of the US Trustee program Clifford White, and trade organizations the Loan Syndications & Trading Association and Creditor Rights Coalition.

The open letter recapped some of the recent changes to the Southern District of New York and the Eastern District of Virginia “to provide for the random assignment of mega chapter 11 cases among all bankruptcy judges within the district.”

The open letter also commented on how the Southern District of Texas remains the exception and “has publicly rejected calls for change, despite an ethics scandal and at a time when the judiciary is already under intense scrutiny.”

Judge Kaplan’s full comments on the concept of a complex panel were as follows:

“I have emphasized that our District will never change our rules to create ‘complex case panels’ or limit assignment of cases in any fashion. All of our judges are more than capable and experienced to handle complex cases. This should be evident with respect to recent assignments of more notable cases such as We Work, Rite Aid, Bed Bath & Beyond, David’s Bridals and Z Gallerie — each of which to different judges in our Court.

Our case assignment procedures for complex cases will remain as is, consistent with all of our cases, randomly assigned based on the debtor(s)’ location in our vicinages. Notwithstanding, I have also been very candid with journalists and others who have inquired that the Chief Judge (me for roughly the next year and a half) or any future chief judge maintains the responsibility and authority to re-assign cases based upon an array of factors such as caseloads, staffing, expertise, health concerns, availability, workload, etc..

Let me make it clear, it is not anticipated that our rule changes will include any modifications at all to the random process we currently employ.”

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