Caesars Entertainment Bets on Mediation — A Developing Trend?

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By Donald L. Swanson

Mediation should be standard procedure in Chapter 11 plan confirmation processes.

Many of us have been arguing this point for years!  Caesars Entertainment now agrees and is placing its bet accordingly. 

Caesars Entertainment files for Chapter 11 relief in the Northern District of Illinois on January 15, 2015 (Case No.15-01145).  On February 3, 2016, Caesars files its Motion to appoint a mediator in the case (Doc. 3195)—see reports in Reuters, Wall Street Journal, and Las Vegas Review.

The Motion requests a mediator “to mediate issues related to a chapter 11 plan of reorganization.”  In support, Caesars Entertainment says: “a neutral, third-party mediator can assist the Debtors and their key constituents in working through plan issues,” and “any mediation should process in parallel” with plan confirmation proceedings.

The Motion claims that mediation “has been the successful path in other large chapter 11 cases.”  The Motion cites the following four examples of a successful mediation path to plan confirmation.

In re Quiksilver, Inc., Case No. 15-11880 (Delaware): a plan is confirmed after the Bankruptcy Court orders parties to mediate their confirmation disputes.

In re LightSquared Inc., Case No. 12-12080 (S.D.N.Y.): a plan is confirmed after an initial mediation effort resolves all but one objection and after a second mediation effort resolves the remaining one.

In re Longview Power, LLC., Case No. 13-12211 (Delaware): a plan is confirmed after disputes with contractors are referred to mediation.

In re Cengage Learning, Inc., Case No. 13-44106 (S.D.N.Y.): a plan is confirmed through a mediation process.

So . . . the Caesars Motion to appoint a mediator is more than a one-in-a-row thing. And the Motion doesn’t even mention the Detroit bankruptcy, where mediation efforts are crucial throughout the entire case—not merely in the plan confirmation process.

Is this Caesars Entertainment Motion a sign of a new mediation trend? Is it a harbinger of things to come in plan confirmation processes?  I say, “Yes.”

Action Item.  Let’s urge all constituencies in every Chapter 11 case to create a “successful path” toward plan confirmation by seeking the appointment of a mediator.

#caesarsentertainment   #bankruptcy   #mediation  #bankruptcymediation

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