Here’s a first of its kind: a report about federal judges mediating other judges’ cases.

• It’s a January 22, 2022, report titled, Other Judges’ Cases, authored by Melissa B. Jacoby, Professor of Law, University of North Carolina at Chapel Hill—scheduled to publish in 72 NYU Annual Survey of American Law (2022).

What follows is an attempt to summarize portions of the report, including its description of a can-this-actually-happen case.

The U.S. Supreme Court, in its Fulton v. City of Chicagoopinion, let Chicago off the automatic stay hook for holding onto impounded vehicles owned by Chapter 13 debtors.

But Fulton is not the last word on that subject.

The new opinion is Cordova, et al. v. City of Chicago, Case No. 19-0684 in the Northern Illinois Bankruptcy Court (issued December 6, 2021, Doc. 154).

Background

This past year was marked by extraordinary deal activity. Record breaking M&A activity drove record breaking private credit activity. Private equity M&A activity was at a substantial high, with over 8,500 deals worth $2.1 trillion, a 60% increase over 2020. Not surprisingly, in this environment, defaults were at all-time lows. The Proskauer Private Credit Default tracker showed an active default rate of approximately 1% at the end of 2021, compared to 3.6% in 2020.

“I have an opening statement that I give at the beginning of every mediation, and it goes like this”:

• “I don’t have a lot of rules but I have one firm rule and that is nobody uses the ‘F’ word—“final offer.”

“And it’s very true. If I had listened to the parties in the Detroit bankruptcy when they said, ‘This is our final offer,’ and banged their laptops shut, Detroit would still be in bankruptcy. So ignore the ‘F’ word.”

Every now and then, (i) something is blatantly obvious, but (ii) those in charge insist that what seems obvious is actually false. Such a disconnect breeds distrust.

That’s precisely what exists in our bankruptcy system. The U.S. Constitution requires that bankruptcy laws be “uniform . . . throughout the United States”:

The opinion is from In re The Diocese of Buffalo, N.Y., Case No. 20-10322, Western New York Bankruptcy Court (entered December 27, 2021, Doc. 1487).

The Diocese of Buffalo asks the Bankruptcy Court to refer its Chapter 11 case and related adversary proceedings to mandatory global mediation–it does so twice. Its first request is denied. It’s second is granted . . . but with limitations.

“Engaged in” eligibility for Chapter 12 (farming operations) and Subchapter V (commercial or business activities) are similar-but-separate things.

An opinion by the Kansas Bankruptcy Court shows the difficulty in addressing the “engaged in” eligibility standards in Chapter 12—even when Subchapter V opinions are consulted as analogous.

“We can’t see what the Subchapter V trustees are doing, so we don’t have an opinion on their effectiveness.”

–This is the response of a couple bankruptcy judges, when asked about the effectiveness of Subchapter V trustees in performing the statutory “facilitate a consensual plan” duty.

Startled!

Startled! That’s my initial reaction, upon hearing the judges’ response.

But the response actually makes sense:

On January 3, 2022, Reuters reports, under the heading “Judge orders mediation for Purdue, Sacklers over opioid settlement,” as follows:

Contents