Bankruptcy Issues are Non-Partisan and A-Political — A Flip-Flopping Exception at U.S. Supreme Court

By: Donald L. Swanson Bankruptcy issues tend to be non-partisan and a-political. Political partisans find it hard to pick-a-side, let alone get worked-up, over such issues as adequate protection, executory contracts and absolute priority. That’s because no one likes bankruptcy, even though it’s a necessity. An Exception A historical exception, however, has been over the question... Continue Reading →

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A Study on Effects of “Apology” on Plan Confirmation in Consumer Bankruptcies

By: Donald L. Swanson “Using a sample of U.S. bankruptcy judges,” this study “asks whether a bankrupt consumer improves her situation by apologizing for breaching her promises.” From a 2013 “Bankruptcy Apologies“ study by two professors from the University of Illinois College of Law [Fn. 1]. An “apology” can be a factor (often a decisive one)... Continue Reading →

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Katz — The Supreme Court’s Most Important Bankruptcy Opinion

By: Donald L. Swanson The most important bankruptcy opinion from the U.S. Supreme Court, since enactment of the Bankruptcy Code in 1978, is this: --Central Virginia Community College v. Katz, 546 U.S. 356 (2006). Here’s why: Katz evaluates the U.S. Constitution’s Bankruptcy Clause against a conflicting part of the Constitution—i.e., the Eleventh Amendment; and Katz  determines... Continue Reading →

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Reflecting Feelings and Interests — A Mediation Study

By Donald L. Swanson A 2016 report on a mediation study looks at how a mediator reacts with participants.  Specifically, the study evaluates what happens when a mediator: --reflects back to participants what the participants themselves express --focuses on a participant's feelings/emotions --focuses on a participant's underlying interests. Findings When a mediator does such things, participants... Continue Reading →

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An Ancient Bankruptcy Law in China

By: Donald L. Swanson Centuries ago (during the 1200’s) the Mongols ruled China. Mongol law in China "provided for declarations of bankruptcy.”  Here are some details: —“no merchant or customer could declare bankruptcy more than twice as a way to avoid paying debts”; and —“On the third time he faced the possible punishment of execution.” [Fn.... Continue Reading →

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Mediation Confidentiality at Second and Ninth Circuits: Stability v. Who Knows?

By: Donald L Swanson You’d expect, these days, that mediation confidentiality is enforced everywhere. But that expectation is wrong. Bankruptcy Hypothetical Let’s start with a bankruptcy hypothetical: Debtor is a small business in Chapter 11 and hopes to reorganize—not liquidate. Debtor reaches a mediated settlement with a large creditor, removing an obstacle to reorganization. Mediating parties... Continue Reading →

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A State-Sanctioned Fraudulent Transfer?

By: Donald L Swanson The majority’s opinion “permits Vandelay to reap a windfall that borders on the obscene.” Hon. William B. Cassel, Nebraska Supreme Court Justice, Dissenting in Wisner v. Vandelay Investments, L.L.C. (Decided 8/24/2018). You’re not going to believe this . . . seriously. Facts of the Case In 2014, Vandelay Investments acquired 650 acres... Continue Reading →

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Special Settlement Problems When Defendant Claims Poverty or Non-Collectibility

By: Donald L. Swanson “I’d be happy to pay the million dollars I owe you. The problem is that I have only two of them.” --A defendant’s claim of poverty and non-collectibility in settlement negotiations. A defendant's poverty/non-collectibility claim creates an interesting dynamic in mediation and other negotiations. And that’s true whether the defendant is an... Continue Reading →

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Renewing the Constitution’s “Bankruptcies” Clause for Bankruptcy Court Jurisdiction

By: Donald L Swanson Back in 1966, when the Bankruptcy Act of 1898 was newly-eligible (in human years) for Social Security, the U.S. Supreme Court issued a 7 to 2 majority opinion in Katchen v. Landy, 382 U.S. 323 (1966). The Katchen opinion is founded in the U.S. Constitution’s “Bankruptcies” clause and authorizes bankruptcy courts to... Continue Reading →

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Mediation Confidentiality: Limits on Waiving It

Competing and Turbulent InterestsBy Donald L. Swanson The case is In re Anonymous, 283 F.3d 627 (4th Cir. 2002).  It’s an attorney discipline action over breaches of mediation confidentiality in an arbitration.  The dispute in arbitration is between an attorney and his former client over litigation expenses.  This dispute arose after the attorney and client concluded... Continue Reading →

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