Why Early Mediation is More Effective in Bankruptcy Reorganization Disputes than in Regular Commercial Litigation

By: Donald L. Swanson “’Early’ (mediation) is good and usually best”; but “Lawyers are not easily persuaded away from the view that they ‘need more info’ before they engage settlement discussions in mediation”; and “in many cases, they may be right.” --Comment by a mediation professional on a discussion board. I agree with this comment—100%—for regular... Continue Reading →

Default Judgment In Bankruptcy, Based on “Implied Consent” Under Wellness International

Implied consent (photo by Marilyn Swanson) By: Donald L Swanson “Sharif contends that to the extent litigants may validly consent to adjudication by a bankruptcy court, such consent must be express. We disagree.” --U.S. Supreme Court in Wellness Int’l Network, Ltd. V. Sharif, 575 U.S. 665 (2015). The Supreme Court’s Wellness opinion adds the following: “The... Continue Reading →

The Small Cheat: Crime and Punishment and “Everyone’s Doing It”

Olde England (photo by Marilyn Swanson) By: Donald L Swanson “Be sure your sin will find you out.” (Numbers 32:23 (KJV)) Every now and then, we get a glimpse into human nature and how people work together, for good and for ill.  What follows is one such glimpse, into the small cheat in business activities. --... Continue Reading →

Paying Pre-Petition Retainers To Debtor’s Counsel From A Lender’s Collateral? (In re 3P4PL, LLC)

The wheels of commerce must continue to turn (photo by Marilyn Swanson) By: Donald L Swanson Under UCC § 9-332, a debtor’s attorney can receive, and keep, pre-petition retainers paid from a lender’s collateral proceeds—absent collusion. That’s the conclusion of a recent Bankruptcy Court opinion in Walters v. Lynch (In re 3P4PL, LLC), Adv. No. 15-1120,... Continue Reading →

A Mandatory Mediation Process In New York — With Sanctions Procedures

New York By: Donald L Swanson As necessity is the mother of invention, so mandatory mediation programs are the progeny of overburdened courts and backlogged dockets. That’s what happened, a couple years ago, in a New York appellate court: this overburdened court, with seriously-backlogged dockets, instituted mandatory mediation as one of a series of steps to... Continue Reading →

Subchapter V Eligibility: No “Currently” Engaged In Business Requirement (In re Blanchard)

“Currently" engaged in flying By: Donald L Swanson In re Blanchard, Case No. 19-12440, Bankr. E.D. La. (Doc. 137, decided 7/16/2020), is a Subchapter V eligibility opinion. The opinion stands for two propositions: Subchapter V exists to help small businesses reorganize; andNothing in Subchapter V, or in the definition of a small business debtor, requires a... Continue Reading →

How Multiple Settlement Alternatives in Mediation are a Disadvantage

By: Donald L Swanson Conventional wisdom says that negotiators prefer multiple settlement alternatives, over a single alternative, because they expect to get better deals when they have more than one. However, such conventional wisdom is wrong, according to a study [Fn. 1] that uses five experiments with simulated negotiations. Multiple Alternatives = Disadvantage in Negotiations The... Continue Reading →

Beware The Automatic Stay Termination When Dismissing To Refile (In re Crilly)

Beware (photo by Marilyn Swanson) By: Donald L Swanson We are seeing voluntary dismissals of Chapter 11 cases these days.  Some dismissals occur to take advantage of Subchapter V.  Others occur to receive pandemic benefits unavailable to debtors in bankruptcy. But hazards are lurking for debtors in such dismissals. One such hazard is the automatic termination... Continue Reading →

Pandemics (Old & New), Prisons, And A Mediation

By: Donald L Swanson Pandemics and prisons don’t go together well -- this we’ve learned from long history.   What follows are three examples: one is new (with mediation involved), and two are old. 2020 -- Covid A June 5, 2020, order from the New Jersey Supreme Court deals with an old issue: prisons and pandemics. The... Continue Reading →

U.S. Constitution’s “Bankruptcies” and “Contracts” Clauses: How They Work Together (In re Klein)

Our current bankruptcy system—with all its wisdom and shortcomings—is a culmination-to-date of the struggles and shortcomings and progress of generations past.

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