On Bankruptcy and Mediation
By: Donald L. Swanson Here are two declarations of law, by the U.S. Supreme Court and from decades ago, that screwed-up our bankruptcy world — all the way to present: “The bankruptcy power, like the other great substantive powers of Congress, is subject to the Fifth Amendment.” Louisville Joint Stock Land Bank v. Radford, 295 U.S.... Continue Reading →
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 →
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 →
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 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 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 “Lending to the most highly indebted companies in the U.S. and Europe is surging.”— Wall Street Journal [Fn. 1] When a large business files for bankruptcy, there is one group that almost always suffers. It is a group with little-to-no power. It is the unsecured trade creditors. It is those that supply... Continue Reading →
By: Donald L Swanson Many people live the American Dream. They’ve started a business and are succeeding. They’re what makes the U.S. economy work. But bad things can—and do—happen to them: things like product obsolescence, economic downturn, health problems, a costly mistake, bad luck. Such things can destroy their Dream and can destroy the entrepreneurs themselves.... Continue Reading →
By: Donald L. Swanson If there’s anything the history of mediation tells us, it’s this: --We’ve gotta trust the process. Here’s an example, that’s happening right now [in June 2018], of how a failure to trust the mediation process creates issues: In re Las Cruces Country Club, Inc., Case Nos. 16-12947 & 16-12947-j7 (Bankry., D. New... Continue Reading →
By: Donald L. Swanson The case is Henry & Buresh v. Weiss (Supreme Court Case No. 17-1210). The U.S. Supreme Court denied certiorari on May 29, 2018. This denial allows an injustice to stand, which is a travesty. I’ll try to explain. Facts Michael Bello was sole shareholder, director, and president of Walldesign, Inc. Over a... Continue Reading →
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