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Insurance Fights Can Complicate The Bankruptcy Labyrinth

By Shane Dilworth

The Court of Appeal has held that a settlement agreement between a bank and a group of companies which included releases of the parties’ affiliates prevented the companies from later pursuing claims against their own affiliates. Those affiliates were held to include former administrators appointed by the bank and the administrators’ solicitors: Schofield v Smith [2022] EWCA Civ 824.

Retired U.S. Bankruptcy Judge Robert E. Gerber once observed that “issues as to the interplay between environmental law and bankruptcy are among the thorniest on the litigation map.” Difficulties navigating this interplay largely stem from the inherent conflict between the goals of bankruptcy and environmental laws, with the former aimed at providing debtors with a fresh start, while the latter cast a broad net to hold parties (even some innocent parties) responsible for past harm to the environment.

“the specter of sanctions and contempt spawns ancillary litigation that often eclipses the issues at the heart of the underlying dispute.”

—From In re A.T. Reynolds & Sons, Inc., 452 B.R. 374, 376 (S.D.N.Y. 2011), reversing a Bankruptcy Court order of contempt and sanctions for lack of “good faith” in a mandated mediation.

Mediation-in-bankruptcy has been an effective tool for resolving mass tort cases.

That effectiveness has been for the benefit of all parties involved, such as:

Hong Kong’s insolvency regime is based mainly on that of the United Kingdom. The legislation concerning corporate insolvency is contained largely in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (“CWUMPO”) and the Companies (Winding-up) Rules. The corporate insolvency and winding up provisions in the legislation are broadly based on the Companies Act 1929 and the Companies Act 1948 of the UK. The last major amendment of those provisions was made in 2016. 

A guide to restructuring and insolvency issues and procedures in Hong Kong

Contents

[This paper originally presented at the Manitoba Bar Association Mid-Winter Conference, January, 2003. It was updated and revised for the 2011 Pitblado Lectures and again updated in June, 2022.]

In large, complex bankruptcy cases:

• The mediator must have a plan;
• Otherwise, the mediator is going to get run over;
• These are tough cases with very experienced lawyers who often have significant resources to put into the fight; and
• The mediator has to be just as resourceful, just as strong, just as ready to engage as the lawyers.

That’s the view expressed by Judge Gerald Rosen (Chief Judicial Mediator in City of Detroit bankruptcy) [fn.1] in a May 2021 interview on the mediation process in the Detroit bankruptcy [fn. 2].

Overview

How are private practice mediators compensated in a bankruptcy case—procedurally?

We have a new court order providing guidance on how such procedures can work.

The new guidance is from Sears Holding Corp. v. Lampert (In re Sears Holdings Corp.), Adv. Pro. No. 19-08250, SDNY Bankruptcy Court. 

Mediation Order