BLS Blog: Chapter 11 Plan Confirmations and Mediation: The Need For Uniformity Under the Bankruptcy Code
Matthew Akiba, Barakat + Bossa, PLLC
“[B]ankruptcy itself is a form of alternative dispute resolution.”[1] One would think that alternative dispute resolution (“ADR”), more specifically, mediation, would be regularly employed by all Bankruptcy courts given the cost and time constraints imposed on debtors who have resorted to Bankruptcy in the first place. Indeed, the main goal of a Chapter 7 proceeding is “to provide certain debtors who are facing severe hardship with the ability to obtain a ‘fresh start,’ free of creditor harassment, the threat of lawsuits, and overwhelming debt.”[2]
The success of many Chapter 11 proceedings on the other hand, depends on the interested parties’ willingness to reach a negotiated settlement of their claims against the debtor.[3] Why then, do only 51 out of the 94 Bankruptcy courts in the United States authorize the use of mediation,[4] and why is ADR only permitted through the promulgation of local rules[5] as opposed to a uniform rule in the Federal Rules of Bankruptcy Procedure? This article will explore the use of mediation through the lens of Chapter 11 proceedings and seek to explain why a uniform rule would bolster the use of ADR in bankruptcy proceedings in the United States.
The Civil Rules Task Force will be making a presentation to the Section on November 17, 2021 at 4 pm concerning the report of the Florida Supreme Court Working Group for the Improved Resolution of Civil Cases, which contains significant proposed changes to the Florida Rules of Civil Procedure. At the presentation, the Task Force will lay out the timeline for review of the proposed rule changes, the opportunity for the Section to comment on the proposed changes, and areas of the proposed changes about which the Section should consider commenting. The Task Force will be circulating zoom information for the meeting in the coming days, and encourages as many section members as possible to attend. Also, if you are interested in joining the Task Force, or have any questions, please contact Russell Landy.
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