People in Conflict Avoid Spending Time Together: A Bad Idea in Mediation?

“Nothing will lower your credibility faster than avoiding conflict.”

–Morris Shechtman, 2003

By Donald L. Swanson

Conflict is difficult.  And conflict is uncomfortable.  So, the easiest and most comfortable way to handle conflict . . . is to avoid it.

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Caucus Room No. 3

That’s why caucus-only mediation has become standard practice in many mediations of business disputes.

In a caucus mediation, the disputing parties sit in separate rooms, and the mediator shuttles back and forth between them conveying negotiating messages.  In a caucus model, the disputing parties rarely talk to each other, rarely have to be in the same room together — heck, they don’t even have to see each other!

Some caucus mediation sessions begin with everyone in a single room, where the mediator explains what will happen and why the parties should get their disputes settled.  But this joint session appears to be trending out-of-fashion in business mediations—because the parties want to avoid spending time together.

In such beginning joint sessions, a representative of each party can give an opening statement.  But such opening statements have been out-of-favor for quite some time—because it’s uncomfortable.

Obviously, caucus-only mediation puts a heavy burden on the mediator to listen carefully and communicate faithfully between the disputing parties.

But there are, apparently, negative consequences from avoiding conflict via caucus-only mediation.

A Mediation Study

A 2016 report on a mediation study is published, in January of 2016, on the effectiveness of various mediation strategies.

Here are some of the findings and a recommendation from the study on the caucus mediation model.

Short-term effects

According to this study, the greater the percentage of time participants spend in caucus, the more likely the participants are to report that:

–the mediator “controlled the outcome”

–the mediator “pressured them into solutions”

–the mediator “prevented issues from coming out”

–they are dissatisfied “with the process and outcome”

–they do not believe “the issues were resolved” with a “fair” outcome

–they do not believe “the issues were resolved” with an “implemenable”               outcome

–they have a “sense of powerlessness”

–they have a belief that “conflict is negative”

–they have a residual desire to “better understand the other participant”

Long-term effects

According to this study, the greater the percentage of time participants spend in caucus, the more likely the participants are to report:

–a decrease in “consideration of the other person”

–a decrease in “one’s ability to talk and make a difference”

–a decrease in the sense that “the court cares about resolving conflict”

–an increase in “the likelihood of returning to court . . . for an enforcement action.”

Study Recommendation

Accordingly, the recommendations of the study include this:

to “discourage strategies that are heavily focused on caucus.”

Consistent With Experience

This recommendation seems to be well-taken, based on my experience.

As I look back over decades of mediation practice, on all sides of the table, items of regret from mediation often center on caucus-only situations.  Examples of such regret include these:

–a personal injury plaintiff wants to tell his story directly to the other side, but doesn’t get the chance.

–a fact dispute might be resolved in a face-to-face discussion of fact issues between the parties in a joint session, but the joint session doesn’t happen

–a credibility issue might be resolved in face-to-face discussions, but that possibility doesn’t get a chance.

What do you think?

 

 

How Mediation at the End of a Case is Wasteful

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A Wasteland

By: Donald L. Swanson

When mediation occurs early-in-a-case, instead of late, “cases are more likely to settle, fewer motions are filed and decided, and case disposition time is shorter, even for cases that do not settle.”

–B. McAdoo, N. Welsh & R. Wissler, “What Do Empirical Studies Tell Us About Court Mediation?” (2004)

A lawsuit consists of these overlapping phases: (i) pleadings, (ii) discovery, (iii) dispositive motions, (iv) pretrial steps, and (v) trial with final verdict or judgment.

The study linked above concludes, obviously, that an early-in-the-case mediation is more effective than a late-in-the-case mediation.

Wasteful

Nevertheless, the customary time for mediation is late-in-the-case: as discovery winds down, pretrial steps are in process, and trial is in the offing. Unfortunately, this late-in-the-case time (without an early mediation effort first) is about as wasteful as can be imagined. Consider this:

–A huge amount of time, effort, energy and fees are spent before a late-in-the-case mediation begins, and avoiding many of such costs can be a powerful incentive to settle in an early-mediation; and

–If the optimum time for mediating is early-in-the-case, then all the time, effort, energy and fees spent between an unused early/optimum time and the late/customary time is a pure and unmitigated waste!

A Faulty Rationale: More Time is Needed

One faulty rationale for end-of-the-case mediation is that the parties need more time to, (i) recognize the risks of their legal position, and (ii) come to grips with the reality of what it takes to resolve the case. Here are two examples of how this rationale is faulty.

1. A lack of opportunity. I remember representing a business defendant who gives ten reasons why they are not responsible for the bad things that happened. The months-long discovery process turns into a ten-step effort that proves each and every one of the reasons wrong. No early-settlement overtures occur in the case from either side, and my client appears ready to engage in meaningful settlement discussions only after all ten reasons are refuted. In retrospect, however, I’m pretty sure that, (i) they knew or suspected, all along, that they were in the wrong, and (ii) would have jumped at the end-of-case settlement terms, had those terms been available early in the case.

2. A lack of imagination. I remember representing a plaintiff against a business defendant that had clearly breached standards of care. But defense counsel refuses, in numerous different contexts, all early settlement overtures (he blames his client for the refusals). We settle at the end with defendant paying much more than defendant would ever have had to pay in an early-stage settlement. The early-refusals cost defendant dearly! I’ve often wondered why all early olive branches were rebuffed . . . and attribute it to a lack of imagination from the other side.

Another Faulty Rationale: Exhaustion Helps

Another faulty rationale for end-of-the-case mediation is the exhaustion element: when parties are weary of paying fees, weary of the time and energy consumed by the lawsuit, and concerned about risks of losing, they become more-inclined to settle. But this exhaustion element bears an unreasonably high price to pay for getting into a better mood for settling the case.

Bankruptcy Experience 

This early-mediation idea is now institutionalized in the Delaware Bankruptcy Court. In 2013, the Delaware Court establishes an early-mediation program for preference cases (see this article).

And it should be noted that early-mediation benefits are particularly in-play for bankruptcy reorganization disputes. Reorganization cases are best served when many disputes are resolved as quickly as possible. The business needs of a debtor, typically, cannot survive long and protracted battles. A debtor, simply, cannot afford to fight every battle all the time. So, early-mediation can be critical to the success of the reorganization process.

Conclusion

Early-mediation is optimal for resolving legal disputes, especially in bankruptcy cases. But end-of-the-case mediation is what usually happens (without any attempt at early mediation).  This is wasteful and needs to change!

🎶 “This is the dawning of the Age of Aquarius [for Bankruptcy Mediation]”🎶 — A New Jersey Example

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A Dawning

By Donald L. Swanson

🎶Harmony and understanding,  Sympathy and trust abounding, . . . Aquarious🎶

                —The Fifth Dimension

The year is 1968.  The musical “Hair” debuts on Broadway, with the self-assurance of those who have thrown off the norms of prior generations.  Aquarius is now here, we are assured.

I’m not sure what happened.  Perhaps Jupiter didn’t align quite-right with Mars.   Or maybe the moon couldn’t figure out where the “seventh house” might be.  

Whatever the explanation, the peace-love idealism of 1968 is confronted by five decades of reality.  The Age of Aquarius still seems far away.   

The Dawning of Mediation

But if, back in 1968, the “dawning” song had been talking about mediation, it would have been accurate–both as to, (1) creating harmony and sympathy, and (2) the beginning of extensive use. 

–As the 1970s and 1980s progress, mediation is beginning to be a common tool for resolving civil lawsuits. 

–Since then, mediation has become a primary means of resolving suits in a most courts.

Bankruptcy Mediation Catching Up

Bankruptcy is an exception to the history of mediation progression.  For the final two decades of the last century / millennium, bankruptcy courts had little use for mediation.

–But, since then, that has been changing.

–Mediation of bankruptcy disputes is starting to catch up with mediation in other civil courts.

A New Jersey Example

An example of this catch-up is in the New Jersey Bankruptcy Court.

For many years, non-bankruptcy courts in New Jersey have had “presumptive mediation” rules.  Here’s what that means: 

–rules of procedure require that mediation occur before a case is tried, unless an exception applies. 

–It’s presumed that mediation will occur in every case.

New Jersey attorneys, in courts other than bankruptcy, are accustomed to presumptive mediation rules, and they plan their case strategies around the mediation requirement.

So, in 2014, the New Jersey Bankruptcy Court decides to catch up with other courts and adopts “presumptive mediation” rules for adversary proceedings.       

 Here is the operative rule language:

“Every adversary proceeding will be referred to mediation,” unless an exception applies.

Specified exceptions are for cases involving pro se litigants, requesting a TRO or preliminary injunction, being initiated by the US Trustee, or involving requests to be excused.

In July of 2016, a New Jersey bankruptcy attorney / former bankruptcy judge (Raymond Lyons) reports that the New Jersey bankruptcy bar “has accepted” presumptive mediation, “after some initial grumbling,” and that “both the bench and bar are happy with” presumptive mediation.

What we see in New Jersey is an example of bankruptcy courts catching up, on use of mediation, with other courts that have, for many years, been using mediation as a primary case-resolution tool.

Conclusion

The Age of Mediation Aquarius has been around for decades in many non-bankruptcy courts.  The Age of Aquarius for bankruptcy mediation is dawning, as well.

Mediation in the Early Stages of a Case: ABI’s “Bankruptcy Mediation” Book

Bankruptcy Mediation-FINAL-SM

By: Donald L. Swanson

The “early parts” of a case under the reorganization chapters of the Bankruptcy Code (chapters 9, 11, 12 and 13) involve many difficult battles.

Early battles are over such issues as relief from stay, cash collateral and DIP financing. The burden of litigation in such matters “can be tremendous,” and such litigation “rarely has any winners.”

–So says Scott K. Brown, Partner at Lewis Roca Rothgerber Christie, in a chapter of  “Bankruptcy Mediation” a book recently published by the American Bankruptcy Institute.Scott K. Brown

The appointment of a mediator for the early issues can have great value. Such early-stage value includes the following, according to Brown:

–“A mediator can help the parties set the stage for (and resolve) future issues regarding plan confirmation.”

–“Having a neutral party guide the reorganization or liquidation efforts of a case from the beginning to the end”:

–“achieves the objective of saving clients significant money,”
–“gives continuity to the process,” and
–“lessens the burden of turning to a mediator on the eve of a confirmation hearing, for example, when it may be too late or too unbearable for the parties to reach middle ground.”

–“A mediator is uniquely positioned to resolve disputes with multiple creditors:

–“These [multi-party] issues are often complex and can sap the limited resources of a debtor (and a court) early in a case.”
–“A mediator can act as the hub that holds the many spokes of the various creditors’ interests together in an effort to temper the ‘burn rate’ that vexes the early stages of many bankruptcy cases.”

 Brown’s elaboration on such matters in the  “Bankruptcy Mediation” book is a must-read.

The book can be ordered here.

 

An Early Mediation Intervention Brings Order Out of Chaos

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Order out of chaos?

By: Donald L. Swanson

Here’s a scenario where early mediation intervention works:

We’re at the beginning of a Chapter 11 case with lots of competing interests.  Everyone is in a fight-every-battle mode—and there are lots of battles to fight.  We’re past the initial flurry of motions for use of cash collateral and relief from stay, and it’s clear that debtor will continue in operation.  But creditors remain hostile, trying to undermine reorganization efforts.  And there is no clear path to a confirmable plan.

Now is the time, in this scenario, for an early mediation intervention.  It’s time for the parties to request, or the court to order, an early mediation!

An Example

I’ve seen early mediation intervention work in reorganization cases . . . and am surprised it isn’t used more often.

Here’s how it works successfully in a prior case:

The prior case has many creditors, a wide range of constituencies and a chaotic existence.  Efforts to bring order and structure to the case fail to gain traction.  So, a dozen-or-more parties and their attorneys show up one day for a mediation session in a large conference room.

The mediation session lasts all day.  It begins with an around-the-conference-room discussion: each party explains its position and view of the case.  Then groups of two and three disputing parties break into closed-door meetings, and not-included parties are wondering what-the-heck is going on.  They complain to the mediator, who assures them everything is okay and advises them to keep talking.

The mediator acts as an orchestrator (as opposed to a controller) of the mediation session.  As the day wears along, parties continue acting on their own initiative: grabbing a disputing party and holding an impromptu discussion, then adding in another party, and then breaking up and beginning anew with another group of parties.  The lines of communication, if diagrammed that day, would resemble movements on a chess board.

As the afternoon wears along, the mediation effort begins to bear fruit.  As everyone leaves the session that evening, the sense of chaos and confusion is gone.  Few issues are resolved, but an organization and a structure and a direction are beginning to emerge for solving the problems of the case.

Bringing Order Out of Chaos

This prior case shows that an early mediation intervention can bring order out of chaos and begin to provide solutions for a difficult case.  Many subsequent negotiations, mediations and court rulings are still needed in that case.  But the early mediation session starts the solution process.

Direct Communications With a Solutions Goal

The genius of early mediation intervention [it’s someone else’s idea, not mine] is in placing disputing parties into direct communication, early in the case, to seek solutions.

–I’m often amazed at what happens when one side hears the pros and cons of their own case from someone other than their own attorney: it can be an eye-opening experience.  I remember a client exclaiming to me during mediation, “We could lose this case!” (as if this were a new revelation), when I’d been telling them that for months.

–And having eyes opened sooner is better than having them opened later—especially in the fast-moving world of bankruptcy.

Conclusion

Early mediation intervention is a tool for, (i) moving a difficult case in a positive direction, and (ii) helping parties with unrealistic ideas get a better view of the case.

How a Contrarian Gets its “Motion to Compel Mediation” Denied

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A Contrarian

By Donald L. Swanson

“for the reasons set forth on the record at the Hearing, the [Motion to Compel Mediation] is DENIED without prejudice.”

U.S. Bankruptcy Judge, Delaware, July 20, 2016

Energy Future Holdings Corp. files Chapter 11 bankruptcy in 2014.  Along the way, it engages in a mediation process that resolves nearly all objections to confirmation of its plan of reorganization.

As the plan confirmation hearing approaches, only a few hold-out creditors remain.

The name of one hold-out creditor is “Contrarian Capital Management, LLC.”

–You can’t make this stuff up.

Mediation Motion

Contrarian files its “Motion to Compel Mediation of Disputes.”  It wants to mediate the issues raised in its objection to confirmation.

Contrarian should get an easy-win on its mediation Motion, right?

–Not hardly.

The Debtor and a Committee object to Contrarian’s mediation Motion.  They say Contrarian’s plan objections are “meritless” and will be rejected at trial.  They also say the mediation Motion is nothing more than an attempt to “derail” and “stall” the plan confirmation process.

The Bankruptcy Court hears the mediation Motion and accepts the “meritless” and “derail” and “stall” arguments.  So, the Bankruptcy Court denies Contrarian’s mediation Motion (the quotation above is the denial order).

Hard-Knocks Rules

In this situation, the following two hard-knocks rules (i.e., rules learned the hard way) seem to be operative:

1.  When a party’s odds of prevailing at trial are viewed by the opposition as 0%, mediation is a waste of time.

–This rule appears to explain part of the Court’s rationale for denying the mediation Motion.

2.  When a party recognizes that its own odds of prevailing at trial are slim-to-none, it’s time to exit the battle as graciously and painlessly as possible (even though the pain of exit will, sometimes, be intense).

–It appears that Contrarian’s mediation Motion may be such an exit attempt, but the attempt isn’t working very well.

 

ACTION ITEM on Mediating Without Local Rules

Action Item:  Every bankruptcy court should have its own set of local rules on mediation.  Every bankruptcy court without such rules needs to get them adopted.  In the words of a famous Nebraskan:  Let’s “git-r-done!”

How to Mediate in Bankruptcy Courts Without Local Mediation Rules: A Seldom-Used Pathway

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A seldom-used pathway

By: Donald L. Swanson

Mediation is standard dispute resolution tool in many bankruptcy cases – especially in large and complex cases.

A limited number of bankruptcy courts, however, still haven’t adopted local mediation rules.  Reasons for the absence of such rules are diverse and range from:

–the somewhat-bizarre development in Chicago, where the Bankruptcy Court actually revoked its local mediation rules—but still encourages attorneys practicing in its court to utilize mediation;

–to a Bankruptcy Judge in Texas who is openly hostile to the use of mediation in his Court;

–to bankruptcy courts that, simply, don’t yet see a need for adopting local mediation rules.

By the way, the American Bankruptcy Institute has already prepared a set of model local rules on mediation.

Here’s a Seldom-Used Pathway for Mediating Without Local Mediation Rules

Mediation is seldom-used in bankruptcy courts that don’t have a local mediation rule.  But it’s still possible to mediate disputes in those courts.  Here is a pathway for doing so.

AUTHORIZATION

Mediation is already authorized in every bankruptcy court in the land—even in bankruptcy courts without local mediation rules!  Here’s the pathway:

Federal Statute28 U.S.C. § 651 provides: “Each United States district court shall authorize . . . the use of alternative dispute resolution processes [including mediation] in all civil actions, including adversary proceedings in bankruptcy.”

Local District Court Rules.  Because of this statute, enacted in 1988, every U.S. District court should have local rules on mediation, including rules for mediating bankruptcy disputes.

Unit / Judicial Officer.  Bankruptcy courts are a “unit” of the district courts, and each bankruptcy judge is a “judicial officer” of the district court, as provided in 28 U.S.C. §§ 151 & 152.

Nebraska’s U.S. District Court, for example, has adopted a “Mediation Plan” under 28 U.S.C. § 651, which includes bankruptcy judges in this provision: “Any district, bankruptcy, or magistrate judge may by order refer a case to mediation.”

§ 105.  Additionally, there is always the fall back position based on 11 U.S.C. § 105, which authorizes a bankruptcy court to “issue any order . . . that is necessary or appropriate to carry out the provisions of this title.”

 

Accordingly, any party wanting to pursue mediation in a bankruptcy court is authorized to do so – whether the bankruptcy court has adopted local mediation rules or not.

The pathway to pursue mediation of a dispute, absent local bankruptcy rules on mediation, is to cite and follow mediation procedures established by the District Court for that jurisdiction.

–Granted, the bankruptcy judge will still need to be be open to:

–authorizing a mediation under District Court rules (the bankruptcy judge has discretion to deny any mediation request); and

–approving the mediator’s employment and compensation, when bankruptcy estate funds are to be used for payment.

CONFIDENTIALITY

Confidentiality is a crucial part of every mediation session.  To assure the greatest-possible level of confidentiality:

–The parties and the mediator should enter into a mediation agreement that contains confidentiality terms and provisions; and

–When seeking bankruptcy court approval of the mediation, the parties should ask the bankruptcy court to explicitly adopt, for this mediation effort, the mediation confidentiality rules that have been adopted by the district court in that jurisdiction.

Let’s Get the Local Mediation Rules Adopted!

So . . . why should a bankruptcy court even bother to adopt its own local mediation rules, if the District Court’s mediation rules already apply?  There are lots of reasons, including:

–Every bankruptcy court has its own local rules establishing procedures to be followed in its own court, and there is no reason to make an exception for mediation; and

–The existence of local mediation rules is a signal that the bankruptcy court is open to, and encourages, the use of mediation; conversely, the absence of such rules is a signal of the court’s indifference or hostility to mediation.

Every bankruptcy court should have its own set of local rules on mediation.  Every bankruptcy court without such rules needs to get them adopted.  In the words of a famous Nebraskan: Let’s “git-r-done!”

Structured Dismissals are Ripe for Mediation – But are They a Bridge Too Far?

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A bridge too far?  (Photo by Justin Swanson)

By Donald L Swanson

A “structured dismissal” of a Chapter 11 bankruptcy involves a settlement agreement among major parties that liquidates substantially all of debtor’s assets, distributes the proceeds, grants releases, and dismisses the bankruptcy case—all as a negotiated package deal.

Most everyone will agree that a bankruptcy settlement with the following terms is a good thing and has become standard bankruptcy procedure:

–promptly turning debtor’s assets into cash (e.g., through a sale of assets or settlement of a lawsuit), followed by:

–distributing sale proceeds to claims of creditors under the Bankruptcy Code’s priority scheme.

A structured dismissal involves all of that.  Plus, it adds such bells and whistles as:

(i) carving-out and gifting portions of a secured creditor’s lien to unsecured creditors,

(ii) releasing the gifting party,

(iii) expediting the claims resolution process, and

(iv) dismissing the bankruptcy.

Will structured dismissals become generally accepted procedures in bankruptcy – just like standard sale and distribution processes?

–A structured dismissal is quick and efficient and maximizes recoveries for creditors.  Compared to the delays and costs of a plan confirmation process, these benefits are huge.

–But not everyone approves of structured dismissals.  Some believe such dismissals go too far in skirting protections established by the Bankruptcy Code.

A Structured Dismissal Example

A recent example is the Third Circuit’s In re Jevic Holding Corp. ruling that approves a structured dismissal — the U.S. Supreme Court granted certiorari on June 28, 2016, and held oral argument on December 7, 2016: we await a ruling.

The Appellant’s Petition for a Writ of Certiorari, in the In re Jevic  case contains an appeal-to-authority argument.  The Petition cites the Final Report and Recommendations of the American Bankruptcy Institute’s Chapter 11 Commission, that:

–“debtors should be able to sell all or substantially all of their assets under section 363(b) when that is the best and most efficient way to maximize value and potentially rehabilitate the business”;

–but structured dismissals are not recommended because they lack “strict compliance with the Bankruptcy Code” for “ending the chapter 11 case.”

It will be interesting to see how the Supreme Court handles the In re Jevic appeal.  Will the Supreme Court address the structured dismissal issue at all?  And if so, will it:

–approve the structured dismissal?

–or decide that a structured dismissal is a bridge too far?

Negotiations for a structured dismissal would be a perfect context for utilizing mediation.

 

Mediators Just Want to Get Paid: A Recent Hiccup in Bankruptcy

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“Your Procrastination is Not My Emergency!”

By Donald L. Swanson

“Girls just want to have fun,” according to Cyndi Lauper.
–And mediators just want to get paid!
We receive an important lesson for mediators getting paid out of bankruptcy from a recent mediation hiccup.  The lesson is this:
–If you want to get paid from bankruptcy estate funds, you need court approval in advance.
The case is In re Magleby (Case No. 16-15322) in the Bankruptcy Court for the Central District of California.  Mr. Magleby, the Chapter 11 Debtor, is having family law disputes with his wife / soon-to-be-ex.

The Chronology

Here’s what happened:

4/24/2016: Debtor files Chapter 11 bankruptcy.
9/27/2016: Bankruptcy Judge orders Debtor and spouse to mediate disputes over multiple bankruptcy/divorce issues.
10/10/2016: First mediation session occurs. Debtor had already paid an $6,500 up-front fee to the mediator but owes an additional $1,925 for this session.
10/12/2016: Mediator submits her $5,775 bill for the remaining $1,925 from the first session plus an additional $3,850 up-front fee for the second session (which is scheduled to occur on 11/2/2016).
10/28/16: Debtor files  “Emergency Ex Parte Application for Authority to Pay Post-Petition Fee of Family Law Mediator,” seeking authority to make the advance payment for the second mediation session.
10/31/2016: Bankruptcy Judge issues “Order Setting Hearing” on the Emergency Application for 11/29/2016.
11/2/2016: The previously-scheduled second mediation session does not occur.
11/8/2016: Debtor files and serves on all creditors an “Amended Application for Authority to Pay Post-Petition Fee of Family Law Mediator,” which requests, (i) after-the-fact approval of the first $6,500 payment, and (ii) advance approval for payment of the $5,775 bill.
11/29/2016: Hearing is held on the Amended Application.
12/5/2016: Bankruptcy Judge issues “Order Approving Debtor’s Amended Application,” which approval is based in part on the fact that no one filed an objection to the Amended Application.

The 10/31/2016 “Order Setting Hearing”

The 10/31/2016 “Order Setting Hearing” contains a lengthy expression of dissatisfaction from the Judge.  Here is a flavor of his thoughts:
–“While the court had encouraged the parties to mediation, . . . the court does not sanction Debtor’s failure to make sure that the applicable rules are followed with respect to the authorization of use of estate funds out of the ordinary course of business.” This is the fault of Debtor’s counsel, he says, not of the Debtor or the Mediatior.
–“ There are several problems with this Application.”
–“First, Debtor . . . has already incurred the obligation . . . to pay the mediator . . . without complying with [advance-approval requirements].”
–“Second,” Debtor’s counsel procrastinated and now requests an emergency hearing.
[Editorial Note: The Court retains a sense of humor:  “Counsel’s procrastination brings to mind that T-shirts are available for purchase online that state: ‘Your Procrastination is Not My Emergency.’”]
–“It appears to this court that the Application is simply an attempt to flout” applicable rules.
–So, “the court hereby . . . sets the Application for hearing . . . on November 29, 2016 at 2:30 p.m.” and “Debtor must serve copies of a notice of the hearing, the Application and a copy of this order on all parties [as required by law].”

Editorial Comments

Whenever a mediator is to be paid from bankruptcy estate funds, everyone needs to remember that all such payments require advance approval from the bankruptcy court.
Everything may have turned out okay in the In re Magleby case for the mediator and the Debtor.
–But it didn’t turn out so well for Debtor’s attorney, who had to, (i) put in a bunch of additional work (undoubtedly, without additional compensation), and (ii) endure disparaging comments from the Bankruptcy Judge.