Nov. 14 (Bloomberg) -- One of the busiest bankruptcy courts in the U.S. has had attorneys return to paper filings because of problems with its Web site.

The Web site used to view cases in the U.S. Bankruptcy Court in Delaware was shut down for almost three days. A related disruption of service also made it difficult to file the kind of billion-dollar cases for which Delaware is famous.

``We've had to file things by paper and then try to follow up later electronically,'' Daniel J. DeFranceschi, a bankruptcy attorney with the Wilmington law firm Richards, Layton & Finger, said in an interview.

Delaware and New York oversaw 77 percent of the Chapter 11 cases filed in the U.S. by companies worth $250 million or more, according to statistics kept by bankruptcy law professor Lynn Lopucki. Because the system is digital, it's open for business 24 hours-a-day, allowing companies to stop a foreclosure or lawsuit in seconds simply by filing an electronic bankruptcy petition.

Court officials are aware of the problem in Delaware and should have it fully resolved in a few days, Karen Redmond, a spokeswoman for the Administrative Office of the U.S. Courts in Washington, said yesterday in an interview. The breakdown can be traced to an upgrade of the system in Delaware, Redmond said.

`Hardware Broke'

``We had a hardware solution for that, but then the hardware broke,'' she said. Other bankruptcy courts weren't affected by Delaware's breakdown, Redmond said.

Late yesterday, after calls from Bloomberg News to court officials, the Web site used to view court documents began functioning again.

Delaware's bankruptcy court has become the nation's hotspot for large corporate filings during the past 18 months, said Lopucki, who teaches at Harvard University and the University of California at Los Angeles. He regularly reviews case filings across the country.

About 60 percent of Chapter 11 cases involving companies with more than $250 million in assets were filed in Delaware from 2007 to June of this year, Lopucki said. New York's bankruptcy courts were second with 17 percent of such filings.

`A Disaster'

``That Delaware Web site is the most important one in the bankruptcy world right now and having it down for three days is a disaster,'' Lopucki said.

Delaware's position as one of the busiest courts for large corporate bankruptcies in the U.S. exacerbated the issue, said David Bird, chief clerk at the Delaware bankruptcy court.

``My understanding is that some courts have had some slight issues,'' Bird said yesterday in a phone interview. ``But because of Delaware's activity, what may be a small issue is magnified.''

The performance of a related system that allows the public to view those new filings and other court records should be improved today, Bird said.

Users of the viewing system were unable to access documents from Nov. 11 to late yesterday.

When either system goes down, the legal rights of creditors, consumers and corporations are threatened, bankruptcy attorneys said.

Lenders, suppliers and employees who have a stake in a corporate bankruptcy may miss an important court hearing because they were unable to check the case docket online, said Charles ``Chuck'' Tatelbaum, a Fort Lauderdale, Florida-based bankruptcy lawyer who handles cases in Delaware.

`Huge Information Vacuum'

``If that's down for an extended time, it creates a huge information vacuum,'' Tatelbaum said.

A consumer who can't file a bankruptcy petition on time may lose her home at a foreclosure auction, said Wilmington bankruptcy attorney Vivian Houghton, who files about 30 consumer cases a month.

``My people stay here after working hours to file an emergency petition,'' Houghton said in a phone interview.

Chief U.S. District Judge Gregory Sleet, who oversees the bankruptcy courts in the state, declined to comment yesterday on the Web site difficulties. Chief U.S. Bankruptcy Court Judge Kevin Carey was out of the office and unavailable for comment.

To contact the reporters on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net; Jef Feeley in Wilmington at jfeeley@bloomberg.net

Last Updated: November 14, 2008 00:01 EST