“United States Bankruptcy Administration” — A 1970s Proposal With Scant Odds

By: Donald L Swanson Imagine a federal bankruptcy agency—like the Securities and Exchange Commission—called the “United States Bankruptcy Administration.” That’s exactly what was proposed by the report of the 1970s Bankruptcy Commission, which resulted in the Bankruptcy Code of 1978. The bankruptcy agency proposal was, in fact, “the most important innovation of the Commission’s report,” along... Continue Reading →

Was the Mediator Blind to Collusion During Mediation, Or Part of It?

By Donald L. Swanson “objectors essentially suggest that [the mediator] was too blind to see collusion at the tip of his nose during the mediation, or that [he] was part of the collusion. The court rejects these insulting, baseless arguments.” Speaks v. U.S. Tobacco Cooperative, Inc., 324 F.R.D. 112, 140 (E.D.N.C. 2018). The Facts On October... Continue Reading →

What Happens When Executory Contracts are Rejected? U.S. Supreme Court to Decide (Mission v. Tempnology)

By: Donald L. Swanson When an executory contract is rejected in bankruptcy, what happens to the rights of the other party under that contract: Are those rights vaporized? Do those rights continue as if nothing happened? or Are those rights affected in some other way? The U.S Supreme Court will tackle this question in the case... Continue Reading →

Early Mediation of Plan Confirmation Issues in Difficult Chapter 11 Cases

By Donald L. Swanson Bankruptcy courts “generally presume that good chapter 11 lawyers can and should negotiate without the help of an outside mediator.” However, some Chapter 11 cases are “so inherently complex” or “riddled” with “high levels of distrust” that “the presiding judge (or more rarely, the parties) views the appointment of a plan mediator... Continue Reading →

Two New Justices on U.S. Supreme Court: Here’s Hoping for a Reset on Bankruptcy Court Authority

By: Donald L. Swanson Justices Scalia and Kennedy are gone from the U.S. Supreme Court and replaced by Justices Gorsuch and Kavanaugh.  Hopefully, this change provides a fresh perspective on bankruptcy law and a reset on bankruptcy court authority issues. Justices Scalia and Kennedy A reset is needed because Justices Scalia and Kennedy voted together to... Continue Reading →

An Empirical Study of Bargaining in Mediation

By: Donald L. Swanson Confidentiality requirements are a difficulty for empirical studies of mediation. But a 2015 study gets around such difficulties and provides insights on details of mediation negotiations. The study is, “Inside the Caucus: An Empirical Analysis of Mediation from Within” [Fn. 1]. Here’s how confidentiality difficulties are minimized in the study: The study... Continue Reading →

Sometimes Good Things CAN Happen in Bankruptcy for Student Loan Debts

By: Donald L Swanson Every now and then a good thing happens in bankruptcy. It’s not very often—but good things do happen. Here’s a story of one of those good things [Fn. 1]. Our Hero (the bankruptcy Debtor) is a 54 year old, single mother of two college-aged children. She is a self-employed professional in a... Continue Reading →

Optimum Timing for Mediation: Early . . . but Not Too Early

By: Donald L. Swanson Mediation should occur "at some reasonable point,” (i) “before discovery is completed,” and (ii) after “critical motions have been decided.” --Suzanne J. Schmitz, A Critique of the Illinois Circuit Rules Concerning Court-Ordered Mediation, 36 Loy. U. Chi. L. J. 783 (2005). Early Mediation Referral Law Professor Suzanne J. Schmitz says that mediation... Continue Reading →

Eighth Circuit’s In re Knudsen Opinion is Still Good Law on Chapter 12 Taxes — Despite the U.S. Supreme Court

By: Donald L. Swanson In 1986, Congress enacted Chapter 12 of the Bankruptcy Code to help farmers. Throughout the 1980s, many farmers liquidated their farm assets, either voluntarily or involuntarily, and moved on to other careers. Unfortunately, the liquidation left many of them with nondischargeable tax liabilities beyond anything they could ever repay. Congressional Action on... Continue Reading →

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