6 Reasons Why Bankruptcy Mediation is a Process, Not a One-and-Done Session: PART FIVE — MULTIPLE PARTY REALITIES

By Donald L. Swanson

Two-party and three-party mediations can fit well into a one-and-done session model.

But four and more parties are difficult to manage in a one-and-done. Consider this: in a four-party mediation that begins at 9:30 a.m. with a 30 minute joint meeting and a 30 minute caucus with each party, it’ll be noon before the mediator concludes the first round of caucuses.

Many bankruptcy disputes are inherently multi-party, such as (i) plan confirmation disputes in the reorganization chapters: 9, 11, 12 and 13, and (ii) priority disputes among all types of competing claims.

Additionally, many bankruptcy cases tee-up a cluster of disputes that are interrelated, intertwined and collectively multi-party.

Extensive preparation efforts are needed in multi-party situations, before the parties can be ready for final mediation sessions.

Such preparation efforts must bring structure and organization to the mediation process. There’s no sense having multiple parties show up at a mediation session, with a one-and-done expectation, only to find confusion about what all the disputes might be—let alone trying to find middle ground for them all.

Such preparation efforts must identify and immediately address disputes that are ripe for prompt resolution. Some parties will want to settle quickly, while others want to continue fighting. The ripe-for-settlement disputes need to be identified and addressed as quickly as possible.

Such preparation efforts must narrow the issues in dispute. It’s often surprising what some advance discussions can accomplish toward finding common ground and minimizing the scope of disputed issues.

Once a structure and organization are established, once early settlements are accomplished and once disputed issues are narrowed, the multiple parties will be ready for final mediation sessions to resolve remaining disputes.

Action Item. Preparation efforts must be made in a multi-party mediation before the parties will be ready for final mediation sessions.

This post is Part Five in a series of six articles explaining how and why bankruptcy mediation needs a different model from the one-and-done session commonly used in non-bankruptcy cases.