By Donald L. Swanson “We in bankruptcy impair contracts all day, every day . . . That is what we do.” --Judge Steven Rhodes, as quoted by Nathan Bomey in “Detroit Resurrected: To Bankruptcy and Back.” Michigan’s State Constitution provides that public pension rights cannot be impaired. So, pensioners take the position, in Detroit’s bankruptcy,... Continue Reading →
By Donald L. Swanson “The decision here is most likely all or nothing. One side is going to win and the other side is going to lose—and that’s going to be very happy on one side and very tough on the other side.” --Judge Steven Rhodes, encouraging parties to reach a settlement, as quoted in... Continue Reading →
By Donald L. Swanson “Puerto Rico’s federally appointed financial oversight board scheduled mediation in debt restructuring talks between the U.S. Territory’s general obligation bondholders and holders [of other debts] backed by sales tax revenue.” The mediation “will run from April 10-13 in New York.” --Reuters.com, March 31, 2017, at 11:09 a.m. An hour later, March... Continue Reading →
By: Donald L. Swanson Who knew that the City of Detroit’s confirmed bankruptcy plan is still in legal jeopardy? Well . . . it is. But the jeopardy today is much-less than it was two days ago. Several Detroit pensioners had challenged the City of Detroit’s plan confirmation order because the plan reduced their benefits. ... Continue Reading →
By Donald L. Swanson Bankruptcy Judge Steven Rhodes declares in his Detroit plan confirmation opinion (Doc. 8257) that the mediated settlements: --Are “an extraordinary accomplishment in bankruptcy”; and --Create “an ideal model for future municipal debt restructurings.” With the benefit of hindsight, we can all agree with Judge Rhodes on both points. But why not... Continue Reading →
Detroit’s use of multiple mediators and hundreds of mediation sessions is not surprising. How else could a Court deal with billions of dollars of debt and a multitude of creditors of a City that must keep operating and must meet the daily needs of its hundreds of thousands of inhabitants.
By Donald L. Swanson “Mediator” and “proactive” are, usually, oxymoronic terms. A mediator’s role is usually passive: to help parties deal with disputes they bring to the mediator. Detroit bankruptcy mediation rejects mediator passivity. One of the early—and monumental—judicial actions in the Detroit bankruptcy is this: the referral of a sweeping array of issues to... Continue Reading →
The Commercial Bankruptcy Litigation website is publishing an article by Donald L. Swanson, entitled "Proactive Mediation: The Great Innovation of Detroit and Diocese Reorganizations." The article appears on the Commercial Bankruptcy Litigation website at this address: https://www.dailydac.com/commercialbankruptcy/litigation/articles/proactive-mediation-the-great-innovation-of-detroit-and-diocese-reorganizations Follow Don on Twitter by clicking here.
By Donald L. Swanson 40 people are in the room at the first mediation session about Detroit’s two pension plans. There aren’t enough chairs in the room to go around, so the mediator, Eugene Driker, stands for the entire four-hour meeting. This is an unusual mediation: Its issues and disputes are newly joined, so the... Continue Reading →