The absolute priority rule is still an impediment to reorganizing medium-size businesses in Chapter 11.
A Strategy for Reorganizing Medium-Size Businesses With Too Much Debt For The Small Business Reorganization Act
The Farm Economy: A Problem For Us All
That’s all well and good for us well-fed folk, who frequent grocery stores stocked with vast arrays of food choices. But such luxuries are not universal—even here in these United States.
Don’t Guess Wrong on Finality for Appeal: Comparing U.S. Supreme Court Opinions (Rytzen and Bullard)
By: Donald L Swanson “An erroneous identification of a final order as interlocutory may cause a party to miss the appellate deadline.” --U.S. Supreme Court in Rytzen Group, Inc. v Jackson Masonry, LLC (decided 1/14/2020) Rarely has a Supreme Court bankruptcy ruling had a more-expansive effect that its most recent pronouncement. The quotation above shows why—because... Continue Reading →
Mediation Confidentiality at Work
By: Donald L. Swanson Every now and then we get a refresher on mediation confidentiality and how it works. Here is one such refresher. The case is Apollo Education Group, Inc. v. National Union Fire Insurance, Case No. CV-15-01948 in Arizona's U.S. District Court. The District Court addresses the admissibility into evidence of three documents from a... Continue Reading →
Merit Management’s Footnote 2 and Justice Breyer’s Point Prevail in Second Circuit (In re Tribune)
By Donald L. Swanson “The parties here do not contend that either the debtor or petitioner in this case qualified as a “financial institution” by virtue of its status as a “customer” under §101(22)(A). . . . We therefore do not address what impact, if any, §101(22)(A) would have in the application of the §546(e) safe... Continue Reading →
When a Case is “Ripe” for Early Mediation
By Donald L. Swanson A 2018 mediation study [Fn. 1] tests the following hypothesis: That referral of a lawsuit to mediation at an early stage is more likely to lead to settlement than a later referral. What the study finds is that timing is a complex issue that’s influenced by and “could be a proxy for”... Continue Reading →
Fraudulent Transfer’s Good Faith Defense: A Futility Exception to Investigation?
By: Donald L Swanson Court Ruling: A transferee on inquiry notice of fraud must diligently investigate its suspicions, before a good faith defense is available, even if an investigation would have revealed nothing. This ruling is from Janey, Receiver v. Magness, Case No. 19-0452 in the Texas Supreme Court (decided December 20, 2019), which Court is... Continue Reading →
Mandated Mediation: Authorized By Federal Statute
By: Donald L Swanson “Any district court that elects to require the use of alternative dispute resolution . . . may do so only with respect to mediation, . . . “ --From 28 U.S.C. § 652(a)—Alternative Dispute Resolution Act of 1998. The correct view on a Federal court's authority to mandate... Continue Reading →
Stressed Family Businesses: Chapter 11 Reorganization Must Work For Them
By: Donald L. Swanson Family businesses who need to reorganize have a tough go in bankruptcy. There are lots of impediments, both legal (e.g., absolute priority rule) and economic (Chapter 11 is expensive). The Small Business Reorganization Act of 2019 will help, but it only applies to businesses with less than $2.7 million of debt. An Extraneous... Continue Reading →
How To Mandate A Voluntary Mediation System That Thrives: A Minnesota Example
By Donald L. Swanson Back in 1994, Minnesota state courts adopt a "mandatory consideration" rule for alternative dispute resolution ("ADR") possibilities. The rule works, back then, like this: Attorneys are required to, (i) consider using ADR in every civil case, (ii) discuss ADR with their client(s) and opposing counsel, and (iii) advise the court of their... Continue Reading →
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