Paying Pre-Petition Retainers To Debtor’s Counsel From A Lender’s Collateral? (In re 3P4PL, LLC)

The wheels of commerce must continue to turn (photo by Marilyn Swanson) By: Donald L Swanson Under UCC § 9-332, a debtor’s attorney can receive, and keep, pre-petition retainers paid from a lender’s collateral proceeds—absent collusion. That’s the conclusion of a recent Bankruptcy Court opinion in Walters v. Lynch (In re 3P4PL, LLC), Adv. No. 15-1120,... Continue Reading →

A Mandatory Mediation Process In New York — With Sanctions Procedures

New York By: Donald L Swanson As necessity is the mother of invention, so mandatory mediation programs are the progeny of overburdened courts and backlogged dockets. That’s what happened, a couple years ago, in a New York appellate court: this overburdened court, with seriously-backlogged dockets, instituted mandatory mediation as one of a series of steps to... Continue Reading →

Subchapter V Eligibility: No “Currently” Engaged In Business Requirement (In re Blanchard)

“Currently" engaged in flying By: Donald L Swanson In re Blanchard, Case No. 19-12440, Bankr. E.D. La. (Doc. 137, decided 7/16/2020), is a Subchapter V eligibility opinion. The opinion stands for two propositions: Subchapter V exists to help small businesses reorganize; andNothing in Subchapter V, or in the definition of a small business debtor, requires a... Continue Reading →

How Multiple Settlement Alternatives in Mediation are a Disadvantage

By: Donald L Swanson Conventional wisdom says that negotiators prefer multiple settlement alternatives, over a single alternative, because they expect to get better deals when they have more than one. However, such conventional wisdom is wrong, according to a study [Fn. 1] that uses five experiments with simulated negotiations. Multiple Alternatives = Disadvantage in Negotiations The... Continue Reading →

Beware The Automatic Stay Termination When Dismissing To Refile (In re Crilly)

Beware (photo by Marilyn Swanson) By: Donald L Swanson We are seeing voluntary dismissals of Chapter 11 cases these days.  Some dismissals occur to take advantage of Subchapter V.  Others occur to receive pandemic benefits unavailable to debtors in bankruptcy. But hazards are lurking for debtors in such dismissals. One such hazard is the automatic termination... Continue Reading →

Pandemics (Old & New), Prisons, And A Mediation

By: Donald L Swanson Pandemics and prisons don’t go together well -- this we’ve learned from long history.   What follows are three examples: one is new (with mediation involved), and two are old. 2020 -- Covid A June 5, 2020, order from the New Jersey Supreme Court deals with an old issue: prisons and pandemics. The... Continue Reading →

U.S. Constitution’s “Bankruptcies” and “Contracts” Clauses: How They Work Together (In re Klein)

Our current bankruptcy system—with all its wisdom and shortcomings—is a culmination-to-date of the struggles and shortcomings and progress of generations past.

Mediation: Sometimes A Judge Must Rule Before Parties Will Settle (In re C2R)

Waiting a tad-too-long? By: Donald L. Swanson It happens in the Chapter 11 case of In re C2R Global Manufacturing, Inc., (Case No. 18-30182 in Eastern Wisconsin Bankruptcy Court): the judge must rule before the parties will settle. That may seem a tad-too-late. But it happens, and In re C2R is Exhibit A. Disputes C2R Global... Continue Reading →

BAPCPA Nearly Backfires (Rose v. Portfolio — Cert. Denied)

A backfire (photo by Marilyn Swanson) By: Donald L Swanson “Backfire” = “to have the reverse of the desired or expected effect”  --from In 2005, the U.S. Congress decided to make life hard for individuals in bankruptcy.  Congress saw fraudulent intent in the minds of their destitute constituents—particularly those who had been living above the... Continue Reading →

Inertia in Decision Making: Implications for Mediation?

Inertia (photo by Marilyn Swanson) By: Donald L Swanson There is “a tendency for decision makers to choose a status quo option.” [Fn. 1] In many decision situations there is a status quo option, which may be the result of a previous choice or may simply be the option that ensues if no action is taken.... Continue Reading →

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