“Chapter 11 plans are inherently suitable for mediation. After all, chapter 11 success is generally defined as a confirmed consensual plan of reorganization, not a contested confirmation battle; that is, it is a settlement, not a victory. ”
–Hon. Lisa Hill Fenning, retired bankruptcy judge and Partner at Arnold & Porter
Judge Fenning contributes a chapter to “Bankruptcy Mediation,” a book recently published by the American Bankruptcy Institute.
She provides unusual and creative insights in this book, including the following:
–Bankruptcy “is inherently a structured settlement process, with the bankruptcy judge as the ‘neutral’ third party.”
–“[T]he entire chapter 11 process is actually a form of alternative dispute resolution–specifically, a form of mediation and/or arbitration.”
–“Although presiding judges rarely ‘mediate’ in any direct sense with respect to the plan process, the most effective bankruptcy judges use the tools of case management” to set the stage for settlements.
–What a judge can’t do, of course, is mediation by “shuttle diplomacy.”
–“Some chapter 11 cases are so inherently complex or riddled with conflicts of interest and high levels of distrust that the presiding judge (or more rarely, the parties) views the appointment of a plan mediator as a virtual necessity from the outset.”
In this chapter of the book, Judge Fenning deals with multi-party and multi-dimensional issues for chapter 11 plan mediation, including:
(a) when issues are ripe for mediation,
(b) tools available to a judge to facilitate settlements,
(c) types of cases in which plan mediators have been particularly helpful, and
(d) procedural matters to be considered.
This is a must-read!
