On Bankruptcy and Mediation
By: Donald L. Swanson The State of New York has a “Mediator Ethics Advisory Committee.” A mediator asked this Committee for an advisory opinion on what to do in the following circumstances (here's its opinion). Facts During a private session, the mediator notices that a party has a tape recorder on her lap. The mediator asks if... Continue Reading →
By: Donald L Swanson Merchant cash advance loans provide ready-cash for businesses in desperate need of cash. Because of the desperation, terms of merchant cash advance loans can be oppressive. For example: Repayments are made daily—by automatic cash withdrawals from debtor’s bank account; Rates of return, if repaid as scheduled, often range from 50% per annum... Continue Reading →
By Donald L. Swanson On July 25, 2019, the U.S. House of Representatives passes on voice vote H.R. 2336, which raises the debt limit for Chapter 12 eligibility from $4.4 million to $10 million. And both parties voted, "Aye"! Who would've thunk it: bi-partisan action by a partisan political body, in today's political environment?! The subject... Continue Reading →
By Donald L. Swanson It’s been 40 years since enactment of the Bankruptcy Code [Fn. 1]. And the Code has been highly effective in many contexts. But the Bankruptcy Code is, and always has been, inadequate for the needs of small businesses and entrepreneurs in financial stress. Congress needs to address this deficiency. What Works &... Continue Reading →
By: Donald L. Swanson “Interruptions increase risk taking by reducing apprehension.” From “The Effect of an Interruption on Risk Decisions” [Fn. 1]. Seven studies by three professors focus on the effect of a brief interruption that occurs when a person is confronted by the need to make a risky financial decision. My point in this article... Continue Reading →
By: Donald L. Swanson On June 28, 2019, the U.S. Supreme Court granted certiorari in the case of Rodriguez v. FDIC, (Supreme Court Case No. 18-1269). The case is about a $4 million tax refund received by a parent corporation in bankruptcy, based upon losses from one of its wholly owned subsidiaries. The question is this:... Continue Reading →
By: Donald L. Swanson Here are a couple assumptions: Mediation is a creative process: it allows parties to think outside the box, discuss underlying issues, and customize a creative resolution. Adjudication, by contrast, is not: it resolves specific issues identified in pleadings. A Study A study titled “Creativity in Court-Connected Mediation: Myth or Reality?” [Fn. 1]... Continue Reading →
By: Donald L. Swanson “Estate planning” is a frequently utilized, but rarely successful, defense against fraudulent transfer claims. Here’s why: estate planning strategies that make perfect sense when everyone is solvent become cloaked with “badges of fraud” amid insolvency, demonstrating “actual intent to hinder, delay or defraud creditors.” Estate planning to address financial defaults is usually... Continue Reading →
By: Donald L. Swanson This doesn’t happen every day: A mediator’s engagement agreement authorizes the mediator to arbitrate disputes about any settlement agreement the parties might reach in mediation; The mediation achieves a settlement agreement, but a dispute arises over an alleged mistake in the agreement document; and The mediator attempts to arbitrate the dispute and... Continue Reading →
By: Donald L. Swanson The U.S. Supreme Court has agreed to decide the constitutionality of the bankruptcy-type system under which Puerto Rico is operating. The case is Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC (Case No. 18-475). Sounds ominous . . . and monumental . . . , right? The reality... Continue Reading →
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