Relativity: Defining “Success” for Multi-Party Mediation in Chapter 11

By: Donald L. Swanson “I stand at the window of a railway carriage which is traveling uniformly, and drop a stone on the embankment . . . I see the stone descend a straight line. A pedestrian who observes the misdeed from the footpath notices that the stone falls to the earth in a parabolic curve.... Continue Reading →

Getting Mediators Approved and Paid in Bankruptcy

By Donald L. Swanson Every now and then a mediator gets stiffed on fees.  It doesn’t happen often.  But it happens.  And it’s always a shame. Mediators of bankruptcy disputes have an additional payment-related hurdle they must navigate.  The hurdle is this: --Advance court approval is required for getting paid from bankruptcy funds. Statutory Requirements... Continue Reading →

The Mediator as Proactive Leader

By Donald L. Swanson “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... Continue Reading →

How a Judge Makes Mediation Work: Minimizing Risks in Close-Call and Winner-Take-All Disputes

By Donald L. Swanson “The decision here is most likely all or nothing.  One side is going to win and the other side is going to lose—and that’s going to be very happy on one side and very tough on the other side.” --Judge Steven Rhodes, encouraging parties to reach a settlement, as quoted in... Continue Reading →

Puerto Rico Turns to Mediation for Assistance in Solving its Financial Crisis

By Donald L. Swanson “Puerto Rico’s federally appointed financial oversight board scheduled mediation in debt restructuring talks between the U.S. Territory’s general obligation bondholders and holders [of other debts] backed by sales tax revenue.” The mediation “will run from April 10-13 in New York.” --Reuters.com, March 31, 2017, at 11:09 a.m. An hour later, March... Continue Reading →

City of Detroit Withstands Another Challenge to Its Confirmed Bankruptcy Plan

By: Donald L. Swanson Who knew that the City of Detroit’s confirmed bankruptcy plan is still in legal jeopardy? Well . . . it is.  But the jeopardy today is much-less than it was two days ago. Several Detroit pensioners had challenged the City of Detroit’s plan confirmation order because the plan reduced their benefits. ... Continue Reading →

The Detroit Bankruptcy Creates “An Ideal Model for Future Municipal [and Other?] Debt Restructurings”

By Donald L. Swanson Bankruptcy Judge Steven Rhodes declares in his Detroit plan confirmation opinion (Doc. 8257) that the mediated settlements: --Are “an extraordinary accomplishment in bankruptcy”; and --Create “an ideal model for future municipal debt restructurings.” With the benefit of hindsight, we can all agree with Judge Rhodes on both points. But why not... Continue Reading →

Multiple Mediators and Hundreds of Sessions for Detroit’s Mediation: Why / How it’s Done

Detroit’s use of multiple mediators and hundreds of mediation sessions is not surprising. How else could a Court deal with billions of dollars of debt and a multitude of creditors of a City that must keep operating and must meet the daily needs of its hundreds of thousands of inhabitants.

Detroit Bankruptcy’s “Proactive Mediators”: A New Mediation Model (Updated 4/1/16 with Responses)

By Donald L. Swanson “Mediator” and “proactive” are, usually, oxymoronic terms. A mediator’s role is usually passive: to help parties deal with disputes they bring to the mediator. Detroit bankruptcy mediation rejects mediator passivity. One of the early—and monumental—judicial actions in the Detroit bankruptcy is this: the referral of a sweeping array of issues to... Continue Reading →

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