On Bankruptcy and Mediation
By: Donald L Swanson Back in 2011, the Third Circuit Court of Appeals wrote a scathing opinion about the behavior of the disputing parties in the Nortel Networks bankruptcy case. The Third Circuit's opinion is published at In re Nortel Networks, Inc., 669 F.3d 128 (3rd Cir. 2011). However, the Third Circuit's judicial scolding has had... Continue Reading →
By Donald L. Swanson Here’s a confession. I’m in a four-party mediation. It begins at 9:30 a.m. in a joint 30-minute meeting. The mediator then spends 30 minutes with each party. It’s now noon — we’re taking lunch orders — and the mediation process has only just begun! At mid-afternoon, positions are far apart, and... Continue Reading →
By: Donald L Swanson First of all, I know this suggestion will never happen. But it should. This suggestion, if implemented long ago, would have dramatically increased odds of a mediated settlement in the Nortel bankruptcy. Such a settlement would have stopped the excessively-expensive and excessively-long-running legal battles in the Nortel Networks bankruptcy (Case No.... Continue Reading →
By Donald L. Swanson Here's a proposal: Mediation among disputing parties should be a condition precedent for a final confirmation hearing on a contested Chapter 11 plan. The short history of bankruptcy mediation bears out the value of this proposal. --Songs of praise have been sung everywhere (in a bankruptcy / professional sort of way)... Continue Reading →
By Donald L. Swanson Have you ever noticed that synonyms for "intransigence" often come from farm animals: e.g., bullheadedness, doggedness, pigheadedness, stubborn as a mule? Such qualities aren't very helpful on a farm. But they are killers in mediation. "Intransigence" describes the four-time failures of the Nortel Networks mediation efforts to reach a funds allocation and... Continue Reading →
By Donald L. Swanson In the early 1980’s, mediation began gaining acceptance in California as a means of resolving disputes. Since then, California law has placed a high value on mediation confidentiality and privacy. The Supreme Court of California, in Simmons v. Ghaderi, 44 Cal. 4th 570, 588, 187 P.3d 934, 80 Cal. Rptr. 3d... Continue Reading →
By Donald L. Swanson Eons ago, as measured by the short history of bankruptcy mediation, we are representing a creditor in a contentious Chapter 11 case. The case has many creditors, a wide range of constituencies and a chaotic existence. Efforts to bring order are having limited success. So someone suggests mediation. Most parties think... Continue Reading →
By: Donald L. Swanson The primary issue in the Nortel Networks bankruptcy is this: How should the remainder of a $7.3 billion fund be allocated among creditors? $2 billion or-so of this fund has already been used to pay professional fees in the fight. The U.S. portion of the Nortel Networks case is in the... Continue Reading →
By Donald L. Swanson “Commercial mediation is firmly established in the dispute resolution landscape. We are, however, still a very young profession.” This is a finding of the Centre for Effective Dispute Resolution (located on Fleet Street in London, England) in its “Seventh Mediation Audit: A survey of commercial mediator attitudes and experience” dated May... Continue Reading →
Action Item. An urgency and an immediacy exist in business bankruptcy cases to preserve and maximize value—otherwise there will be nothing for creditors to fight over. Mediation plans, strategies and models must provide immediate help in these urgent situations.
MEDIATBANKRY 