They’re in a bit of a pickle–Part One: Mediation Confidentiality in Chicago’s Bankruptcy Court

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By Donald L. Swanson

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Pickle Jar

Reuters reports that, Caesars Entertainment signs a “non-disclosure agreement” with various parties “as part of mediation process.”

Here’s saying that the parties to any such “non-disclosure agreement” are in a bit of a pickle. Here’s why.

The Bankruptcy Court in Chicago recently deleted its Local Rules on mediation.

So, the question is this: To what extent is a “non-disclosure agreement” in support of a mediation-without-court-authorization enforceable in Chicago’s Bankruptcy Court against others who don’t sign it?

Presumably, someone has this figured out.

But, typically, legal authority for mediation arises from statutes or court rules that provide, explicitly, for confidentiality of information shared in mediation–and for non-discoverability of such information from a mediator.

But now, operating without such rules in Chicago, how can anyone be certain of confidentiality?

Ok. Ok. The focus of my entire blog is this: “Promoting Bankruptcy Mediation.” So everyone should realize that I’m not much-impressed with what the Chicago Bankruptcy Court is doing on mediation.

But it’s not just me. Here is mandatory language from a United States Statute (28 U.S.C. Sec. 651) on providing local mediation rules:

“Definition.—
. . . [A]n alternative dispute resolution process includes . . . mediation . . .
(b)Authority.—
Each United States district court shall authorize, by local rule . . . , the use of alternative dispute resolution processes in all civil actions, including adversary proceedings in bankruptcy.” [Bold face added for emphasis].

So . . . in light of this statutory directive from Congress, why-the-heck is the Chicago Bankruptcy Court deleting its local mediation rules? Perhaps they think they are now operating under the District Court’s mediation rules? If so, that’s not what they’re saying.

A fine little pickle this is.

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