On Bankruptcy and Mediation
By: Donald L. Swanson Congress must be allowed “to fashion a modern bankruptcy system which places the basic rudiments of the bankruptcy process in the hands of an expert equitable tribunal.” --Justice Blackmun, dissenting in Granfinanciera v. Nordberg, 492 U.S. 33 (1989). Forty years ago -- back in 1978 -- Congress enacted the current Bankruptcy Code.... Continue Reading →
By: Donald L Swanson Historically, bankruptcy courts and bankruptcy professionals have been lagging adopters of mediation. They’ve been slow to utilize mediation for resolving bankruptcy disputes, and they’ve been slow to adopt local rules on mediation. Today, however, 76 (80.85%) of all 94 bankruptcy court districts have a local mediation rule of some type (see this... Continue Reading →
By: Donald L. Swanson The absolute priority rule is the greatest legal impediment to reorganizing a family business under Chapter 11—no other legal impediment is even close. In what follows, I offer a strategy for beating that rule. The Absolute Priority Rule The absolute priority rule is a Chapter 11 plan confirmation requirement. It says:... Continue Reading →
By Donald L. Swanson The Judges are irritated, to begin with. If anything is clear in In re Anonymous, 283 F.3d 627 (4th Cir. 2002), it’s this: the Judges on the U.S. Court of Appeals are more-than-slightly unhappy with the two attorneys in the case. A Confidentiality Issue The Court hauls two competing attorneys before the... Continue Reading →
By: Donald L. Swanson I’ve been practicing law since 1980. A major portion of my practice, throughout those decades, has been in bankruptcy and related areas of law. And I’ve represented all sides: debtors, creditors, trustees, committees, etc. During that time, I’ve counseled hundreds of family businesses and their owners—helping each walk through a period of... Continue Reading →
By: Donald L. Swanson Have you ever been in a multi-party mediation representing a small-player in the dispute. I don’t mean your party is “small”: I mean that your party’s position in the over-all dispute (while extremely important to the client) is viewed by others as a lower-tier issue. I have. And it’s a difficult situation:... Continue Reading →
By: Donald L. Swanson You know how bankruptcy debtors can strip-away out-of-money liens in Chapters 11, 12 and 13, using 11 U.S.C. § 506? Well . . . they can’t do it in Chapter 7. That’s because of a screw-up by the U.S. Supreme Court in an early opinion under the Bankruptcy Code—the opinion is Dewsnup... Continue Reading →
By Donald L. Swanson Some time ago, I published an article titled, “Contingent Fee or Success Fee for Mediators: Why Not?” The punchline of the article was, in the words of Paul McCartney, “Let it be.” Responses to the fees issue in that article were strong and largely negative, as expected. So, I’d like to take... Continue Reading →
By: Donald L. Swanson A Hypothetical: You’ve sued an individual in state court for injunctive and other relief. Your defendant then files bankruptcy and receives a Chapter 7 discharge. Then, you ask the state court to determine that you can proceed with the lawsuit, despite the bankruptcy discharge. The state court says you can, and so... Continue Reading →
By: Donald L. Swanson Immeasurable harm has resulted from an inability to appreciate that opposing views can be reasonable and coherent. A major cause of such harm is this: partisans lose touch with the views of others and dismiss contrary perspectives as foolish or biased. These propositions are from the authors of a 2015 study [Fn.... Continue Reading →
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