“The concept of a mediator going outside of the role of just settling a dispute and soliciting money to help settle that dispute is unprecedented in the history of bankruptcy and in the history of mediation as far as I know.”
–Judge Steven Rhodes, as quoted in “Detroit Resurrected: To Bankruptcy and Back,” by Nathan Bomey.
The “grand bargain” in Detroit’s bankruptcy involves private foundations providing large sums of money to solve two problems: (i) saving Detroit’s art museum from creditors, and (ii) providing money for retiree claims.
Bomey explains, in his “Detroit Resurrected” book, that the “grand bargain” is the brainchild of the lead mediator in Detroit’s bankruptcy, Judge Gerald Rosen, and is the result of Judge Rosen’s efforts. Without the “grand bargain,” the path of the Detroit bankruptcy would have been dramatically different.
The “grand bargain” is one example of the expanded and proactive role that lead mediator, Judge Rosen, filled in the Detroit case.
A Lesson for Other Mediation Cases
What the Detroit’s proactive mediator team teaches is this:
–Every mediator and every party in every bankruptcy plan mediation should be open to a proactive role for the mediator in addressing special or unusual circumstances of the case.
To be clear: no one is saying that Judge Rosen’s efforts in the Detroit bankruptcy are a model for every mediator. Detroit is, undoubtedly, a special case.
But bankruptcy mediators (and the parties and bankruptcy courts who use their services) should be open to expansions of what mediators normally do.
–The Detroit bankruptcy shows that an expanded mediator’s role can be invaluable and essential.
–A passive mediator in the Detroit case would, by comparison, have been impotent and irrelevant.
So . . . in bankruptcy, and particularly in complex and difficult matters with multiple constituencies, everyone should be thinking about how a mediator’s role might expand to meet the needs of the case.
Here’s why: because the Detroit case shows it works!