On Bankruptcy and Mediation
By: Donald L. Swanson Here’s an experience that’s common to all trial attorneys. We’re working in our litigation War Room. Trial is scheduled to begin in ten days. Our focus on trial preparations is intense. But then the phone rings. It’s an attorney on the other side with a settlement offer. The offer is a... Continue Reading →
“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. That's why caucus-only mediation has become standard practice in many mediations of business disputes. In... Continue Reading →
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... Continue Reading →
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... Continue Reading →
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... Continue Reading →
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,... Continue Reading →
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... Continue Reading →
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!”
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... Continue Reading →
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... Continue Reading →
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