If you were a party to a lawsuit or a contested matter in a bankruptcy proceeding, would you be interested in working towards settlement with the assistance of an impartial third party, that is, a mediator, rather than take on the significant cost of litigation and going to trial? More and more parties in bankruptcy cases are answering this question with a resounding yes. See generally, Mediation Matters: The Use of Mediation in Large Chapter 11 Cases (Part I), ABI Journal, August 2023.
It is difficult to track the use of mediation in bankruptcy cases, as participation in mediation may occur informally and/or referral to mediation may not appear on the docket. Reliance on mediation, at least in chapter 11 cases, appears to have been occurring for decades. The results of a 2009 survey of bankruptcy judges revealed that “81 percent of judges reported using mediation in their chapter 11 cases in some capacity and plan negotiation was the most common reason for mediation.” Id. (citing Ralph Peeples, “The Uses of Mediation in Chapter 11 Cases,” 17 Am. Bankr. Inst. L. Rev. 401, 406 (2009), available at abi.org/members/member-resources/law-review).
More recently, there is a growing trend of reliance on