“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.
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.
This Act requires a creditor to send notice of a mediation opportunity before attempting to collect a defaulted farm loan. The statute says:
“At least thirty days prior to the initiation of a proceeding on an agricultural debt in excess of forty thousand dollars, a creditor . . . shall provide written notice directly to the borrower of the availability of mediation.”
What happens after the notice is entirely voluntary.
A Surprising Development
In my early career, I view this mediation notice requirement as a mere formality: a compliance detail creditors must satisfy before suing on a delinquent farm debt. I do not, back then, see mediation as a viable, problem-solving tool.
But my view on this changes – all in a single day. The change happens like this.
I am retained (back in 1987 or so) by a rural bank to, (i) file a lawsuit against a farmer to collect a delinquent farm loan, and (ii) then represent the bank in the bankruptcy proceeding that will undoubtedly be filed in response.
I send the mediation notice, as required by the above-quoted statute. The farmer responds and wants to mediate. A mediation session is scheduled.
In discussing the upcoming mediation with my client, I express doubts about the effectiveness of mediation. And I opine that the mediation session will be a mere formality, with an exceedingly-low probability of achieving any resolution.
So, we agree that a bank officer will attend the mediation session with the bank’s home-town attorney – and that I won’t make the several-hour trip to attend.
Late in the afternoon of the mediation session day, I receive a telephone call from the bank officer (the call comes as a surprise because I did not calendar — and forgot about — the mediation session).
His first words are: “We settled the case!”
I remember being amazed . . . and baffled . . . and more-than-a-little embarrassed. I say, in response, “That’s great!” But what I’m really thinking is: “Oops!” and “How did I miss this so badly?”
From that moment on, I’ve been a believer in mediation and its possibilities – even when prospects for settlement appear to be almost nil. And this belief has proven, on multiple subsequent occasions, to be well-founded.
Who would guess that pre-lawsuit mediation would work well in resolving credit disputes between creditors and farmers in stressed financial circumstances? But this is precisely what has happened in farm states under farm mediation statutes.
Mandatory v. Voluntary Pre-Lawsuit Mediation Statutes
Many farm states have established mediation prerequisites for a creditor to file a lawsuit on a defaulted farm obligation. Some state statutes require a notice of mediation, but mediation developments thereafter are entirely voluntary. Other state statutes require much more.
“A creditor . . . desiring to initiate a proceeding to enforce a debt against agricultural property . . . shall file a request for mediation with the farm mediation service. The creditor shall not begin the proceeding . . . until the creditor receives a mediation release. . . [Such requirements] are jurisdictional prerequisites to a creditor filing a civil action.
“A creditor desiring to start a proceeding to enforce a debt against [a farmer] . . . must serve an applicable mediation notice . . . on the debtor . . . The creditor may not begin the proceeding until [certain mediation requirements are satisfied].”
Farm mediation statutes in other states merely require that a creditor provide notice of mediation possibilities to the farm debtor before pursuing collection of a farm debt.
Effectiveness of Farm Mediation
A Tulsa Law Review article from 1993provides an assessment of the effectiveness of such farm mediation requirements during the 1980s Farm Crisis. The article refers to a “report prepared by Leonard Riskin for the Administrative Conference of the United States” that evaluates the effectiveness of farm mediation requirements in eight states. The article says this (at 175-76, emphasis added):
“The Riskin report includes data detailing the number of mediations in eight states. . . . [The study] solicits information on the number of requests for mediation, the number of cases, and the disposition of cases. While all eight states had an agreement rateof higher than 50%, the percentages range from a low of 55.5% in Minnesota to a high of 93% in Montana. One assumes that the differences in agreement rates are due, in part, to whether a state has a mandatory or voluntary mediation program, and to the disparities in the number of cases each state processes.”
It should be noted that U.S. Census data show that Minnesota and Iowa are high-population states with many farms (Iowa has 3.1 million people and 2.1 million farms; Minnesota has 5.5 million people and 74,500 farms), while Montana is a low-population state with fewer farms (1.0 million people and 27,800 farms).
A 2015 Fiscal Year report of mediation effectiveness of Minnesota’s Farmer-Lender Mediation program shows significant improvement from the 1980s experience. in 2015:
–2,472 mediation notices were sent by creditors
–1097 farm debtors requested mediation, of which 917 completed mediation
–The total amount of debt reported and addressed in the mediation sessions is “approximately $180.6M”
—97% of farm debtors who completed mediation reached a settlement with the creditor
Pre-lawsuit mediation can be highly effective. A mediation agreement rate between 55.5% and 97% is pretty-darn-good!
Again, let’s emphasize that we are talking here about pre-lawsuit mediations. These aren’t cases where everyone has been fighting in court for a long time, is weary of the fight and is, therefore, highly motivated to get disputes settled. These are before-the-legal-fight-begins mediations.
Whether pre-lawsuit mediation statutes provide for voluntary mediation or mandate mediation, settlement rates are strong.
It’s always great to see an experiment produce successes that lead to an expansion of the experimental endeavor.
This success-and-expansion is exactly what’s happened with mandatory mediation experiments in the Delaware Bankruptcy Court.
Delaware’s Mandatory Mediation
The Delaware Bankruptcy Court began mandating mediation, by local rule, in preference cases back in 2004.
Nearly a decade later, the Delaware Bankruptcy Court expands its mandatory mediation program to include all adversary proceedings filed in Chapter 11 cases. The new language, appearing in Local Rule 9019-(5)(a), is this:
–“all adversary proceedings filed in a chapter 11 case . . . shall be referred to mandatory mediation.”
The Delaware Bankruptcy Court’s history with mandated mediation is positive. One advantage of such a mandate-by-local-rule is this:
–attorneys know that a mediation must occur before trial, so they plan on the mediation and incorporate mediation into their case plans and strategies.
Mandatory Mediation Elsewhere
In addition to the history of success-and-expansion in Delaware preference actions, mandatory mediation has a long history of success-and-expansion elsewhere too. For example:
–In the Second Circuit Court of Appeals, mediation experiments from the 1970s contain a mandatory mediation component — and those experiments became successful.
–Today, nearly all of the U.S. Circuit Courts of Appeals have mediation programs with a mandatory mediation component that are similar to the Second Circuit’s experiment efforts in the 1970s.
Here’s predicting that mediation-mandated-by-local-rule will become increasingly prominent in bankruptcy courts throughout the land.
In a remarkable demonstration of cooperation and coordination, three separate courts (both Federal and State) enter proactive mediation orders and appoint the same mediator in three related cases.
The cases involve a genetically modified strain of corn developed and marketed by Syngenta. The new strain gets regulatory approval from the U.S. and other countries – but not from China.
Corn prices begin dropping when China begins rejecting U.S. corn shipments that contain even a trace of this new strain.
So, corn farmers begin suing Syngenta in state and Federal courts throughout the Corn Belt.
–Many of these cases are consolidated into a multi-district proceeding in the U.S. District Court in Kansas.
–Many of these cases are moving forward in a Minnesota state court, where Syngenta is located.
–And many of these cases are pending in the U.S. District Court for Southern Illinois.
The Kansas proceeding is now certified as a class action, though class certification is on appeal to the Tenth Circuit. Ag Census data from 2012 counts 2.1 million farms in the U.S., many of which plant corn and would be covered by this class action.
Jury trials in the Syngenta cases are scheduled to begin this Spring on individual farmer cases, as class representative or bellweather trials.
[An interesting / ironictwist: Syngenta is being sold to a company from China, and the proposed sale is wending its way through regulatory scrutiny.]
Proactive Mediation Orders
Back in March of this year (2016), all three Syngenta judges enter similar mediation orders and appoint the same mediator (here are links to their respective mediation orders: Kansas case, Minnesota case and Illinois case).
–Each order identifies the mediator as a “Special Master for Settlement,” because the mediator is appointed under civil procedure Rule 53 on special masters.
These orders establish an atypical mediation process.
— Typical mediation is passive: a mediator is hired to meet with the disputing parties (usually in a one-and-done session) and help them reach a settlement.
–These orders are highly proactive: it’s more like “mediation on steroids.” [I wish I could take credit for coining this phrase.]
Each of these orders provides that the mediator may:
–Order the parties to meet face-to-face and engage in serious and meaningful negotiations.
–Construct an efficient procedure to engage the parties in settlement negotiations.
–Order production of all necessary information.
–Order the appearance of any persons necessary to settle any claims completely.
–Make recommendations to the court concerning any issues that may require resolution in order to facilitate settlement or to efficiently manage the litigation.
–Direct, supervise, monitor, and report upon implementation and compliance with the Court’s orders, and make findings and recommendations on remedial action if required.
–Require the parties to appear in person, via video conference, or telephonically.
–Pursuant to Rule 53(b)(2)(B), communicate ex parte with the Court at any time.
Next Mediation Steps in Syngenta
It’s difficult, if not impossible, to predict when (or if) the Syngenta cases will become ripe for mediated settlements on ultimate/global/final disputes. Perhaps such ripeness will occur before jury trials begin in the Spring—or maybe ripeness will await the conclusion of some of those trials.
But it seems safe to assume that the proactive mediator is, meanwhile, working diligently and behind-the-scenes to, (i) resolve interim disputes, and (ii) create a structure and organization for addressing and resolving ultimate/global/final disputes when they become ripe for settlement.
–Interim disputes example: A recent Order (Doc. 2703) from the Kansas Court reveals that the mediator helped resolve disputes over language in the initial class action notice document.
Application to Bankruptcy Cases
Syngenta is not in bankruptcy.
But the proactive mediation established by the Syngenta courts in Kansas, Minnesota and Illinois is similar to the proactive mediation established, and utilized effectively, in the City of Detroit bankruptcy and in other large bankruptcy cases.
Here’s predicting that proactive mediation will (and should) become standard practice in Chapter 11 reorganization cases and in Chapter 9 municipal adjustment cases.
We all make assumptions — every day — about many things. Our false assumptions are our illusions.
There are many illusions about mediation, most of which place restrictions on the role and effectiveness of the mediation process. We all have them. Fortunately, we now have solid evidence to dispel some of them — courtesy of the U.S. Circuit Courts of Appeals.
The U.S. Circuit Courts of Appeals have been conducting formal mediation programs for decades. The earliest began in the mid-1970s. And the Circuit Courts have been studying the impact and effectiveness of those programs for years.
Based on such studies, we now know that some of our mediation assumptions are mere illusions.
Here are six of such illusions that limit the role and effectiveness of mediation.
1. Mediation is a voluntary process that cannot be mandated.
Mediation programs in nearly-all of the U.S. Circuit Courts of Appeals feature mandated mediation. Parties can request mediation in such Courts. But mediation is going to happen in many, many cases whether the parties request it or not. The Courts simply assign cases to mediation.
This mandatory feature has been around for a very-long time: i.e., it hails back to the earliest experimental program of the 1970s in the Second Circuit.
Studies of mediation programs in the Circuit Courts conclude, uniformly, that these programs are achieving great success. And much of the success is attributed to the mandatory-assignment feature.
2. Mediation by telephone is inadequate – the mediation must occur in-person.
Conventional wisdom says that mediating parties must all be in the same room – or in the same suite of conference rooms – or at least in the same building. Such wisdom seems to hold sway, even when the mediation consists exclusively of a mediator shuttling between conferences rooms in a caucus format, with the parties never laying eyes on each other.
A report from the Sixth Circuit Court of Appeals lays this conventional wisdom to rest:
“The Sixth Circuit’s mediation program . . . settles about 40% of appeals that participate in mediation. . . . most of those resolutions were agreed to over the telephone. Unlike most circuits, over 90% of the Sixth Circuit’s mediations are held by telephone – which is certainly appreciated by attorneys and parties. Most other circuits use telephone mediations just 20-50% of the time.”
3. Every Federal judge and every Federal court is free to decide whether to approve of or utilize mediation.
Congress and the Courts have established mediation and other ADR processes as official policy of the U.S. Government.
In the Alternative Dispute Resolution Act of 1998, Congress directed each U.S. District Court “to encourage and promote” ADR use “in its district.” Each Bankruptcy Court and Judge is, by statute, a “unit” and a “judicial officer” of the U.S. District Court.
By 1996, nearly all U.S. Circuit Court of Appeals had their own mediation programs—today, all of them do. Such programs preceded Congressional action on the subject – and perhaps prompted such action by Congress.
Additionally, all Federal agencies have adopted ADR rules and procedures as a result of the Administrative Dispute Resolution Act of 1996.
Some bankruptcy courts and judges, apparently, believe they’ve fallen through the Federal-policy-cracks on mediation and are exempt from the broad-based Federal policy favoring mediation.
—But they haven’t: they are subject to this Federal policy.
4. Cases with high-levels of complexity are ill-suited to resolution though mediation.
The last hold-out, among the U.S. Circuit Courts of Appeals, to establish a mediation program is the Federal Circuit: it finally got around to adopting a mediation program in 2005.
The Federal Circuit’s caseload includes patent cases, which tend to have high levels of complexity. This complexity became a primary rationale for the Federal Circuit’s holdout against mediation: because of complexity (the rationale says), patent cases are “ill-suited” to mediation.
“More and more IP cases are being successfully mediated at the district court level. One federal magistrate judge . . . had mediated over 200 patent cases . . . The settlement rate approached 90% for mediations during the last 12 months of the reporting period . . . The message: IP cases are more amenable to successful mediation than previously thought.”
5. Settlements will occur at the same rate, whether mediation happens or not.
Here is a finding from a 1983 study by the Federal Judicial Center of the Second Circuit’s mediation program:
“The [mediation] program does result in the settlement or withdrawal of appeals that would otherwise have to be considered by three-judge panels . . . The program almost certainly results in faster disposition, not only of appeals that are settled or withdrawn . . . but also of appeals that would have been settled in any event; it probably results in faster disposition of appeals that are argued.”
6. Mediation in an appellate court will impair the law-making function of that court.
This assumption is, actually, a primary argument used back in the 1970s, 1980s and 1990s in opposition to the development of mediation programs in the Circuit Courts.
The concern is that mediated settlements of Circuit Court cases “would deprive the courts of their ability to expand the corpus of the law.” The concern is about their role of clarifying the law and enhancing its predictability by issuing precedential opinions: this role would be impaired by mediated settlements, the argument goes.
Actual results, however, are to the contrary. In the Third Circuit, for example:
“It is clear in retrospect that the mediation program has had no adverse effect on the development of Circuit law. The Court writes precedential opinions in only 15% of its cases. That number has remained consistent since the inception of the Appellate Mediation Program.
The foregoing identifies six assumptions about mediation that restrict its use and scope and effectiveness. Each of these six assumptions is demonstrably false . . . wrong . . . illusory.
There are many, many other limiting assumptions about mediation that are, similarly, false . . . wrong . . . illusory. Unfortunately, the restrictive hold of such illusions is difficult to overcome.
“The civil Appeals Management Plan (CAMP), now operating in the United States Court of Appeals for the Second Circuit, is an innovative set of reforms in the appellate process. . . . This is the first time the [mediation] procedure has been implemented systematically.”
The CAMP mediation program began in 1974 as an experimental effort by the U.S. Second Circuit Court of Appeals. The program got off the ground with initial financial support from the Federal Judicial Center.
A burgeoning caseload rationale for this experiment-in-mediation is explained in the 1977 Report like this:
“Today, it is common to point to the dramatic growth in the business of federal courts over the last fifteen years. While growth in court business is nothing new, the increase in the business of the federal courts of appeals during the last two decades is unprecedented in the history of this institution.”
“Demands for the services of the federal appellate courts seem to have outstripped the available supplies. There are strong suggestions that simply meeting the growth in demand with increased resources is unsatisfactory for the court of appeals. An increase in the number of active judgeships for a circuit is not without its own costs.”
An initial evaluation of the mediation program in this 1977 Report found little to cheer or brag about:
“The results . . . suggest suspending judgment on CAMP. It seems clear that the plan does not yet live up to early expectations, but the evidence does not prove the CAMP idea ineffective. . . . Rigorous evaluation is essential to any further work in this area. Without such research, effective reform of the appellate process will remain an elusive goal.”
However, a 1983 follow-up evaluation and Report contains these “strikingly more favorable” conclusions:
“The Second Circuit remained committed to the CAMP concept and maintained the program” after the 1977 Report.
“The findings in this second evaluation are strikingly more favorable. The benefits disclosed by the first study persisted into the period covered by this evaluation.”
“Of even greater significance, the hoped-for increase in settlements of appeals, which eliminated the need for full argument, was achieved at statistically significant levels.”
“A number of federal and state courts have launched programs reflecting the CAMP approach; still others are presently considering a variety of related programs.”
–“The measure of potential benefits identified in this study will certainly be encouraging to those courts.”
–“Indeed, the potential is so great that all persons sharing responsibility for the management of appellate caseloads should give these procedures serious consideration.”
The success of the Second Circuit’s mediation experiment is demonstrated in the following information:
–by 2001, all U.S. Circuit Courts of Appeals “have well-established mediation programs” similar to the Second Circuit’s CAMP program. There is, however, one exception and one variation:
–The exception. “The U.S. Court of Appeals for the Federal Circuit is the only Circuit Court of Appeals that does not have a mediation program that provides third party assistance to parties seeking an alternative to appellate litigation. . . . The Federal Circuit does not provide any form of mediation . . . leaving unassisted settlement negotiations or appellate litigation as the only options.
The Federal Circuit adoptsa similar mediation program in 2005.
The Second Circuit’s mediation program is seven-years to two-decades (and more) ahead of similar programs in the other Circuit Courts of Appeals. Indeed, the other Circuit Courts followed the Second Circuits innovations and lead.
Obviously, we owe a debt of gratitude to the Second Circuit for its foresight, creativity and pioneering efforts on mediation and for blazing a now-well-used pathway toward mediation as a primary dispute-resolution tool for the Federal judicial system!
Not everyone is a fan of mediation. And one Texas Bankruptcy Judge is emphatically opposed.
Here is an unofficial transcription (from the official recording) of an in-court exchange occurring on September 3, 2014, as reported on this webpage:
“The Court: . . . Is the Trustee eventually going to be using estate funds to pay the mediator?
Male Speaker: I think that’s what we had envisioned.
The Court: Over my dead body. I do not like mediation. I think it is wasteful for the most part and you all needed to get my permission.”
As to possibilities for compensating the Trustee’s efforts in mediation, the Judge says:
“Ain’t gonna happen. Don’t you ever do that again.”
The Judge explains:
“I think for the most part mediation is a waste of time and money. You all are grown up big boy attorneys. You can talk settlement. You’ve been talking settlement And I’m not going to allow more money to go to a mediator. Either you settle it or you don’t. But don’t ever do that again. . . .
I think mediation is undercutting the jury trial system in this country and I think it is making lawyers lazy and judges lazy and I also think it’s excess costs to pay for a mediator. . . . And I think it is rare that I allow people to go to mediate so don’t do it ever again.”
“Mediation is not free. The parties must pay not only the mediator, but also their respective counsel”
“Some clients do not want to be forced into mediation; rather, they simply want their day in court because they want vindication from a judge that their actions were legal, or at least not illegal.”
“Fear of trial by the attorney is another factor . . . Some attorneys who are not experienced in actually trying disputes in the courtroom push their clients into mediation by explicitly — and incorrectly — telling them that the judge insists that the parties undergo mediation or that the local rules require mediation.”
“Another factor to consider is whether the attorneys for the parties are able to communicate with each other as well as with their own clients.”
“The final factor to consider is the importance of having a hearing (or trial) so that one party will win and the other will lose. The losing party, by learning a hard lesson in the courtroom — including how unpleasant it can be to undergo cross-examination by opposing counsel — may stop behaving in the manner that created the dispute in the first place. However, if that same party does not lose in the courtroom, but rather settles at a mediation (without the embarrassment and sting that can come with a courtroom loss), the party is more likely to continue the same behavior and foment future disputes similar to the one that has settled in mediation. Thus, in certain instances, it is appropriate for a court to deny mediation in the interest of pushing a ‘winner take all’ scenario.”
So . . . there you have it.
I’m going out on a limb here: I think the foregoing judicial actions and rationale are faulty — and more-than-a-little bizarre!
For starters, what’s with an “undercutting the jury trial system” rationale from a bankruptcy judge? Jury trials are exceedingly rare in bankruptcy courts.
And the Judge’s “final factor to consider” is disturbing.
A function and purpose of a bankruptcy trial is to teach “a hard lesson” to bad actors through an “embarrassment and sting”?!
–Such a stereotype might have validity in a criminal case where the defendant actually committed a crime (yet, plea bargains are common in the criminal world).
–But in the bankruptcy world, this stereotype is downright awful!! It’s an affront to all those innocents who get dragged into a difficult situation against their will.
–What about, for example, preference defendants who did nothing wrong?
–What about lien priority disputes over technical filing and notice rules? Improprieties are nowhere involved.
–Or what about an injured party who wants a settlement as quickly and efficiently as possible and has no interest in teaching any kind of lesson to anyone?
–And whatever happened to the interests of judicial economy? Trials are expensive.
Scheesh!! I get irritated all-over-again every time I re-read that “final factor.” . . . Which means it’s probably time for me to stop typing.
But the words “mandatory mediation” refer only to a required process. They do not suggest any such thing as compelled settlement or compelled concession or even compelled listening.
The operative adage for mandatory mediation is this:
“You can lead a horse to water but you can’t make it drink.”
Online sources say this is the oldest-known adage in the English language. It dates back to at least the year 1175. The phrase appears thereafter, for example, in a play published in 1602 called “Narcissus“:
“Your parents have done what they coode,
They can but bringe horse to the water brinke,
But horse may choose whether that horse will drinke.”
I say this time-honored adage is sufficient authority for what should happen in a mandatory mediation in today’s bankruptcy courts. After all, our bankruptcy jurisprudence and jurisdiction hearken back to “the stuff of the traditional actions at common law tried by the courts at Westminster in 1789” (see, e.g., Stern v. Marshall, 564 U.S. 2 (2011 )).
“Good faith” in mandatory mediation means showing up for participation in the mediation as ordered.
So, what’s the point of mandatory mediation, if it isn’t to compel parties to do something beyond merely showing up?
Here are but-a-few of such points:
1. You never know. Many-a-disputing-party has shown up at a mediation session with no expectation or hope of settling. But lo-and-behold a settlement happens anyway.
2. Bluffing happens. Some people project a belligerent front in negotiations with the hope/expectation that such a front will scare/move the other side into a favorable settlement. After all, displays of bravado-without-substance are common in the non-human animal world. So . . . such actions probably happen in human negotiations too [not that I have ever done — or even thought about doing — any such thing!]. A mandatory mediation provides opportunity for bluffing parties to move away from belligerence toward resolution.
3. Failure/success is a false mediation dichotomy. Whoever started the idea that mediation failure/success is defined by the conclusion of a mediation session should be castigated! Such a dichotomy is false. It’s wrong. It’s harmful. It’s . . . etc.
–Success/failure of a mediation session (particularly a mandated one) should be measured, instead, by the existence of progress toward a voluntary resolution.
–“The whole idea [of mediation] is to get the parties talking.” So says a speaker at a recent CLE event. The goal of a mandatory mediation should be to make progress on furthering communications between the parties: not to produce, as if by magic, an immediate settlement between parties-at-war.
Shouldn’t we treat people (in mandatory mediation contexts) with at least the same deference we afford to thirsty horses?
I came up with this formula back in 1983, while preparing for a seminar presentation on basic bankruptcy law. I was trying to come up with something creative to say. And . . . I must confess . . . I thought it was pretty clever at the time.
And now . . . I’m more-than-a-little pleased and proud [or as people say these days, “humbled”] that the formula proves to be accurate in the vast majority of all bankruptcy cases.
But what’s true in the vast majority of all bankruptcy cases has little to do with the Nortel Networks bankruptcy.
And so it is with my little formula — it has nothing to do with the Nortel Networks bankruptcy case. Nothing.
Back in July of 2015 (when total professional fees expended in the battle are only $1.3 billion), the Bankruptcy Court makes this finding:
–“A pro rata distribution would result in all Creditors receiving an approximate 71% return on their Claims.”
Say what?! A 71% return?!
All this fighting has now cost $2 billion in professional fees. And it’s over the last 29% of recovery?!
. . . Oh, my.
Unsecured creditors in nearly all bankruptcy cases would exult over a 71% return.
But no. Not for Nortel Networks creditors. “A 71% return” are fighting words.
“Don’t be settling these disputes in mediation,” seems to have been the battle cry.
Nortel Networks creditors apparently hope to dissipate the entire pot of gold — or at least most (or a large percentage) of it — to prove a point . . . of some sort or other . . . that is known only to themselves.
Here’s guessing that the continuing fight has a net-negative impact on everyone. No one will ultimately win.
Surely there is a lesson in this for the rest of us?