On Bankruptcy and Mediation
By: Donald L. Swanson One of the best innovations in the U.S. bankruptcy system is creation of bankruptcy appellate panels (“BAPs”), as a division of the U.S. circuit courts of appeals. BAPs hear appeals of bankruptcy court decisions. Currently, there are five BAPs, one in each of the following circuits: First, Sixth, Eighth, Ninth and... Continue Reading →
By Donald L. Swanson “Even if a plan emerged out of mediation that unfairly discriminated against financial creditors, it’s the court’s responsibility to block the deal.” -- Judge Steven Rhodes, as reported by Nathan Bomey in “Detroit Resurrected: to Bankruptcy and Back.” Judge Rhodes is defending his mediators in the City of Detroit bankruptcy against... Continue Reading →
By: Donald L. Swanson Here’s a case about the effects of executory contract rejection. While its focus is on “intellectual property” rights under § 365(n) [Fn. 1], the case also delves into the effects of rejection for all types of executory contracts under § 365(g) [Fn. 2]. And this case demonstrates the hazards of a failure... Continue Reading →
By: Donald L. Swanson “There was a settlement . . . many arguments have been constructed to get around that unfortunate fact, but it’s a fact.” --Bankruptcy Judge, during hearing on Motion to enforce a mediated settlement in Lehman Brothers bankruptcy. It’s common in business bankruptcies for the estate to pursue preference and fraudulent transfers claims. Sometimes,... Continue Reading →
By: Donald L. Swanson Imagine buying assets out of bankruptcy at a fair price, only to have a previously-unknown liability tag along. --Surprise, surprise! The U.S. Supreme Court has an opportunity to weigh-in on such a “Surprise, surprise” issue. A petition for writ of certiorari is pending in a case where this could happen—complete with a $63... Continue Reading →
By: Donald L Swanson “Any district court that elects to require the use of . . . alternative dispute resolution in certain cases may do so . . . with respect to mediation.” Alternative Dispute Resolution Act of 1998 (28 U.S.C. § 652(a)). “I don’t feel comfortable requiring parties to mediate.” Ubiquitous sentiment among judges. I... Continue Reading →
By: Donald L Swanson “Congress shall have Power”: “To establish . . . uniform Laws on the subject of Bankruptcies throughout the United States”; and “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers.” U.S. Constitution, Art. I, Sec. 8, cls. 4 & 18 (emphasis added). Any opinion... Continue Reading →
By: Donald L. Swanson We “sought to determine whether the reasons for mediator success are the same for all successful mediators, or whether different mediators succeed for different reasons.” Prof. Stephen B. Goldberg and Margaret L. Shaw in a 2008 report titled, “The Secrets of Successful (and Unsuccessful) Mediators.” The study: In their study, Prof.... Continue Reading →
By: Donald L. Swanson Tuesday, July 31, 2018, is the last day of Anthony Kennedy’s three-decades-long service as a Justice of the U.S. Supreme Court (since February 18, 1988). On bankruptcy issues, Justice Kennedy did not author many opinions of any sort (majority, concurring or dissent). Nevertheless, he has always been a part of what I... Continue Reading →
By: Donald L. Swanson The U.S. Supreme Court has a history of screwing-up our bankruptcy world. Examples go back to the 1982 debacle called Northern Pipeline v. Marathon Pipe Line, where the Supreme Court came within one vote (one vote!) of declaring the entire Bankruptcy Code unconstitutional. A more recent example, Stern v. Marshall in 2011,... Continue Reading →
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