On Bankruptcy and Mediation
By: Donald L. Swanson "The court declines to adopt a new mediation privilege under the facts of this case." --Judge Cynthia A. Norton, U.S. Bankruptcy Judge -- December 19, 2016 The case is In re Lake Lotawana Community Improvement District, a Chapter 9 municipale bankruptcy in the Western District of Missouri (Case No. 16-42357). The issue... Continue Reading →
By: Donald L. Swanson “Confidentiality is an important feature” of mediation, because it "promotes the free flow of information that may result in the settlement of a dispute." “We vigorously enforce the confidentiality provisions” of our own mediation system “because we believe that confidentiality is essential" to its “vitality and effectiveness.” U.S. Second Circuit Court... Continue Reading →
By: Donald L. Swanson I've been asked many times for the number of bankruptcy court districts who, (i) HAVE adopted local rules on mediation, and (ii) HAVE-NOT adopted such rules. --The have-not courts, it seems, are hanging on to the past -- for reasons that are unknown . . . and not readily apparent. Initial... Continue Reading →
By: Donald L. Swanson Mediation needs to be included — explicitly and by name — in the Federal Rules of Bankruptcy Procedure. Mediation Authorization and Confidentiality The new mediation provision must cover two specific subject areas: (i) mediation authorization, and (ii) mediation confidentiality. Authorization. If a city is a Chapter 9 debtor in a jurisdiction... Continue Reading →
By: Donald L. Swanson (d) Confidentiality Provisions.— Until such time as rules are adopted under [28 U.S.C. §§ 2071 et seq.] providing for the confidentiality of alternative dispute resolution processes . . . , each district court shall, by local rule adopted under section 2071(a), provide for the confidentiality of . . . dispute resolution... Continue Reading →
By: Donald L. Swanson It's a beautiful scene: Federal courts applying and enforcing their local rules on mediation confidentiality. --Nearly all U.S. District Courts and U.S. Circuit Courts of Appeals, and many Bankruptcy Courts, have such local rules. But then the Ninth Circuit Court of Appeals comes along with a bombshell. It suggests that local... Continue Reading →
By: Donald L. Swanson Chapter 11 Debtor successfully mediates confirmation disputes with a half-dozen creditors. Now, a hold-out creditor moves for discovery of the mediation communications in an effort to torpedo plan confirmation. The mediating parties come to realize that their Bankruptcy Court has no local rule requiring mediation confidentiality. And, of course, there is... Continue Reading →
By: Donald L. Swanson Four law firms are squabbling over how to divide a $20 million attorney fees fund in a bankruptcy case. [Insert your own derisive epithet here.] The Facts A two-year and multi-session mediation results in settlements of asbestos-related claims. One such settlement involves a $90 million payment from an insurance company, $70... Continue Reading →
By: Donald L. Swanson "I found the [Mediator's resignation] letter to be a little bit bewildering." --A. Benjamin Goldgar, Chicago Bankruptcy Judge, September 21, 2016. Judge Goldgar is, obviously, an excellent jurist with excellent judgment. But everyone makes mistakes. And Judge Goldgar's flap with the Caesars mediator over... Continue Reading →
By Donald L. Swanson Here is a photo of the resignation letter from the mediator in the Caesars Entertainment bankruptcy proceeding. Wow!! That's an interesting take. And kudos to the mediator. It's always refreshing to see a principled stance. This Caesars case is pending in the Bankruptcy Court for the Northern District of Illinois, located... Continue Reading →
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