Mediation as a Case-management Tool

<p>In an effort to keep up with an increasing caseload, more bankruptcy courts are instituting mediation/arbitration
procedures as part of their local rules. This alternative is being pursued as resources available to bankruptcy courts
are limited by lack of congressional action on new bankruptcy judges and annual bankruptcy budget reductions in
the face of record bankruptcy filings.

</p><p>It is up to the clerk's office to see that the mediation/arbitration procedures are properly implemented, maintained,
evaluated and revised. The mediation /arbitration rules and procedures adopted by various bankruptcy courts can be
obtained from the court's web site (www.Xb.uscourts .gov), where X stands for the district and b stands for
bankruptcy (<i>i.e.,</i> the Southern District of New York would be NYSB, Delaware would be DEB and Oregon would
be ORB, etc.). Each court will have a designated panel or registry of mediators/ arbitrators, which should also be
listed on the court's web site along with the qualifications to serve in such a capacity and an application form for
those interested in serving. The panel is usually maintained by the clerk of court or some other person designated by
the court.

</p><p>Courts have used various means to provide for mediation/arbitration, ranging from appointment of a mediator, only
when requested by a party, to appointment by the court after a specified time. The District of Delaware, in order to
address in excess of 15,000 preference actions filed during the last two years (with the prospect of even more being
filed in the future), is in the process of instituting a procedure that provides for the appointment of a mediator
should the parties fail to settle the matter or stipulate to an order assigning the matter to mediation within 90 days
after an answer or other responsive pleading is filed. The bankruptcy estate will be required to pay for the cost of
mediation. Below is a flow chart of the Delaware mediation process.

</p><p>The merits of this process and similar mediation/arbitration procedures in other courts are readily apparent. It
provides the court with a method to deal with a high volume of matters that have the potential for settlement prior
to trial. For the litigant, it provides a potential expeditious means of resolution at significantly less cost. It also
allows system resources to be preserved for the matters that merit full litigation.

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