On Bankruptcy and Mediation
By: Donald L. Swanson The primary issue in the Nortel Networks bankruptcy is this: How should the remainder of a $7.3 billion fund be allocated among creditors? $2 billion or-so of this fund has already been used to pay professional fees in the fight. The U.S. portion of the Nortel Networks case is in the... Continue Reading →
By Donald L. Swanson “Commercial mediation is firmly established in the dispute resolution landscape. We are, however, still a very young profession.” This is a finding of the Centre for Effective Dispute Resolution (located on Fleet Street in London, England) in its “Seventh Mediation Audit: A survey of commercial mediator attitudes and experience” dated May... Continue Reading →
Action Item. An urgency and an immediacy exist in business bankruptcy cases to preserve and maximize value—otherwise there will be nothing for creditors to fight over. Mediation plans, strategies and models must provide immediate help in these urgent situations.
By Donald L. Swanson Non-bankruptcy cases usually have a different priority than bankruptcy cases: namely painting a picture v. maximizing value. In non-bankruptcy cases, an event or series of events occur, and the focus is, typically, on (i) painting a clear picture of what happened, and (ii) assigning or absolving liability accordingly. In non-bankruptcy cases,... Continue Reading →
By Donald L. Swanson A sale in bankruptcy of assets owned by Nortel Networks Inc. results in a $7.3 billion (yes, that's $7,300,000,000) pot of gold for creditors. Guess what: creditors can't agree on how to divide the pot. So what do creditors do instead? They spend $2 billion from the pot of gold on... Continue Reading →
By Donald L. Swanson --Mediators “showed a marked preference toward” a facilitative style of mediation, but --Mediators “believe that parties and their advisers expect them" to use an evaluative style of mediation. These findings are recently published (on May 11, 2016) by the Centre for Effective Dispute Resolution (located on Fleet Street in London, England)... Continue Reading →
Action Item. Preparation efforts must be made in a multi-party mediation before the parties will be ready for final mediation sessions.
By Donald L. Swanson Two-party and three-party mediations can fit well into a one-and-done session model. But four and more parties are difficult to manage in a one-and-done. Consider this: in a four-party mediation that begins at 9:30 a.m. with a 30 minute joint meeting and a 30 minute caucus with each party, it’ll be... Continue Reading →
By Donald L. Swanson Multi-party mediation can work effectively in bankruptcy, especially on plan confirmation issues. Such effectiveness is apparent in the City of Detroit and the Archdiocese of Milwaukee bankruptcy cases. Keep in mind that these Detroit and Archdiocese mediation efforts aren’t merely multi-party in the sense of five or six parties. These mediation... Continue Reading →
Action Item. In every bankruptcy mediation where the fight is still fresh, we need to recognize that a one-and-done session expectation is probably unrealistic—and adjust our expectations accordingly.
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