top of page
  • Writer's pictureCooper Shattuck

What Makes Mediation in a Bankruptcy Case Unique?

Mediation is an excellent means of resolving disputes. It allows parties to negotiate with the help of an independent, neutral, third party – the mediator. But a mediator should be more than a potted plant who silently passes offers back and forth. At the appropriate time in the process, a skilled mediator can help the parties explore their interests and potential settlements which are in the best interest of everyone involved. In a bankruptcy case, a knowledge of the underlying substantive issues is important, but so is a knowledge of the overarching paradigm in which those issues must be addressed – the bankruptcy.

Bankruptcy practitioners are knowledgeable of the bankruptcy process but may have limited familiarity or experience with other complex issues which might arise in a dispute involving a bankruptcy.

The list of substantive complex issues which may be involved in a bankruptcy case is as long as those involved in any other civil dispute, and may include:

  • Multi-district litigation (MDLs)

  • Class actions

  • Consumer fraud

  • Lender liability

  • Environmental claims

  • Toxic torts

  • Pharmaceutical claims

  • Compliance issues

  • Construction law

  • Federal contracts

  • Public works

  • Sureties

  • Wrongful death

  • Products liability

  • Dram shop

  • Aviation

  • Federal regulation

  • Mass torts

  • Employment claims


  • Benefits

  • Oil and gas matters

  • Healthcare

  • Intellectual property

  • Licensing

Likewise, someone familiar with the substantive issues at play in the underlying dispute may not appreciate the unique challenges of resolving that issue in the context of a bankruptcy case, with unique issues such as:

  • Chapter 11s

  • Debtor-in-possession

  • Debtor financing

  • Workouts

  • Plans of reorganization

  • Trustee’s claims

  • Involuntary filings

  • Plan approval

  • Claim prioritization

  • Chapter 7s

  • Liquidations

  • Fraudulent transfers

  • Preferences

  • Adversary proceedings

Having a mediator who is knowledgeable in the underlying substantive dispute and the bankruptcy context is critical to helping the parties explore all possibilities that may exist for a win-win resolution of disputes in a bankruptcy case. And making use of the same mediator throughout the life of a bankruptcy can save substantial time and costs for all involved. Few mediators have the experience necessary to accomplish this. But finding the right one is an investment in success.


bottom of page