Fix-it folks have tool boxes full of screw drivers, pliers, box-end and open-end wrenches, crescent and socket wrenches, etc., for handling nuts, bolts and screws. But when fix-it folks need a tool that grabs-and-holds and won’t-let-go, they pull a vise-grip from the toolbox.
Similarly, judges have local rules [a toolbox] full of procedures to handle and resolve disputes in their courts. But when judges need a tool to grab-and-hold disputing parties and not-let-go, they pull a mandatory mediation order from the toolbox.
When vise-grips are missing from a toolbox, fix-it folks use ingenuity to handle vise-grip tasks in other ways. But the other way is almost always more difficult, takes more time and can scratch-things-up a bit.
The same is true for judges and mandatory mediation: if mandating authority is needed-but-missing, judges use ingenuity to get disputes dispatched in other ways; but the other way is almost always more difficult, takes more time and can create collateral damage.
Caesars Entertainment bankruptcy illustrates some problems when a mandating tool is absent: efforts to resolve crucial disputes had been unsuccessful, the Judge agrees mediation is needed, but the Judge says he can’t order it. Instead, the Judge suggests in a metaphorical / Oz-related comment (i.e., click your heels and say, “There’s no place like mediation”) that the parties double-down on voluntary mediation.
However, pretending we are in the Land of Oz, even metaphorically, is probably not the best approach to resolving already-intractable disputes.
By contrast, local rules in both Delaware and S.D.N.Y. bankruptcy courts authorize mandatory mediation orders:
Delaware Rules provide: (1) “Notwithstanding any provision of law to the contrary, the Court may refer a dispute pending before it to mediation” [Rule 9019-3]; and (2) “The Court may assign to mediation any dispute arising in an adversary proceeding, contested matter or otherwise in a bankruptcy case” [Rule 9019-5].
S.D.N.Y’s Order on Mediation under Rule 9019-1 provides: “The Court may order assignment of a matter to mediation upon its own motion, or upon a motion by any party in interest or the U.S. Trustee.
Word is that both Delaware and S.D.N.Y. bankruptcy courts utilize such rules to good effect.
Follow Don on Twitter by clicking here.