On Bankruptcy and Mediation
By: Donald L. Swanson Hypothetical: Bank’s borrower is in a lawsuit. Legal fees are mounting, with no end in sight. The attention of borrower’s management is consumed by it. Borrower’s business is suffering. And Bank wants borrower to get the case resolved. Question: Can Bank suggest, insist, or even demand, that customer schedule a mediation... Continue Reading →
“Nothing will lower your credibility faster than avoiding conflict.” --Morris Shechtman, 2003 By Donald L. Swanson Conflict is difficult. And conflict is uncomfortable. So, the easiest and most comfortable way to handle conflict . . . is to avoid it. That's why caucus-only mediation has become standard practice in many mediations of business disputes. In... Continue Reading →
By: Donald L. Swanson When mediation occurs early-in-a-case, instead of late, “cases are more likely to settle, fewer motions are filed and decided, and case disposition time is shorter, even for cases that do not settle.” --B. McAdoo, N. Welsh & R. Wissler, “What Do Empirical Studies Tell Us About Court Mediation?” (2004) A lawsuit... Continue Reading →
By Donald L. Swanson "🎶Harmony and understanding, Sympathy and trust abounding, . . . Aquarious🎶" --The Fifth Dimension The year is 1968. The musical "Hair" debuts on Broadway, with the self-assurance of those who have thrown off the norms of prior generations. Aquarius is now here, we are assured. I'm... Continue Reading →
By: Donald L. Swanson The plan confirmation process does not provide a party to the mediation “with a renewed opportunity to challenge the [mediated] settlement to which they are bound.” --In re RPP, LLC, 547 B.R.158, 164 (Bkrtcy.W.D.Pa. 2016). The RPP, LLC bankruptcy case is a Chapter 11 reorganization, with plan confirmation occurring on June... Continue Reading →
By: Donald L. Swanson Mediation is firmly entrenched as a dispute resolution tool in bankruptcy. Mediation is commonly and regularly used throughout the bankruptcy system. And mediation’s value in bankruptcy is almost-universally recognized. A Mediation Gap But there are wide gaps in bankruptcy where mediation is still under-utilized. One of the gaps is consumer cases. ... Continue Reading →
By: Donald L. Swanson The "early parts" of a case under the reorganization chapters of the Bankruptcy Code (chapters 9, 11, 12 and 13) involve many difficult battles. Early battles are over such issues as relief from stay, cash collateral and DIP financing. The burden of litigation in such matters "can be tremendous," and such... Continue Reading →
By: Donald L. Swanson Here’s a scenario where early mediation intervention works: We’re at the beginning of a Chapter 11 case with lots of competing interests. Everyone is in a fight-every-battle mode—and there are lots of battles to fight. We’re past the initial flurry of motions for use of cash collateral and relief from stay,... Continue Reading →
By: Donald L. Swanson It's always great to see the leaders in any realm continue to innovate. The Bankruptcy Court in Delaware is, most definitely, a leader on such matters as bankruptcy mediation. And this Court continually innovates. In 2004, for example, the Delaware Bankruptcy Court adopts mandatory mediation for preference actions. And a telephone-participation... Continue Reading →
By Donald L. Swanson “for the reasons set forth on the record at the Hearing, the [Motion to Compel Mediation] is DENIED without prejudice.” U.S. Bankruptcy Judge, Delaware, July 20, 2016 Energy Future Holdings Corp. files Chapter 11 bankruptcy in 2014. Along the way, it engages in a mediation process that resolves nearly all objections... Continue Reading →
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