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Authors of the Bankruptcy Litigation Committee's most recent newsletter hosted a call to discuss their topic, mediation of bankruptcy disputes. Click here to review this full newsletter.
The Mediation Committee is pleased to announce a new ABI publication: Bankruptcy Mediation. ABI last published a book about mediation in 2009. Since then, the application of mediation to all aspects of the bankruptcy process has grown exponentially. As of 2016, numerous Bankruptcy Courts have adopted local rules on mediation and many have pre-certified panels of mediators. As the result of the skillful application of mediation, numerous issues have been resolved economically.
“In my mind, there was a stigma attached to bankruptcy. Bankruptcy meant weakness, failure . . . that you weren’t able to take care of yourself and your family on your own, as a man,” Jose Miranda told us.
In recent years, bankruptcy judges — including the co-author of this article — have been mediating cases with more frequency. Parties in bankruptcy-related disputes often request that one of the local bankruptcy judges mediate their cases, or in other cases, that a bankruptcy judge refer a matter to a colleague for mediation. Having bankruptcy judges mediate disputes can be an effective and economical way to resolve contentious matters.
In many bankruptcy courts, using mediation to resolve complex disputes, or at least narrow issues in dispute, has become commonplace.[1] In fact, in certain jurisdictions mediation of adversary proceedings is mandatory.[2] However, one recent bankruptcy court expressed disapproval at the notion that every bankruptcy dispute should be mediated, and set forth the factors it will consider before allowing parties to expend any estate funds on mediating disputes.
Autonomy. Flexibility. Privacy. Cost Efficiency. Closure. These are some of the many reasons that parties choose to mediate. But once the parties agree to mediate, then what? Below are suggestions to help you maximize the value of mediation in bankruptcy cases.
