Mediation has gained general acceptance in the legal community
but has been slow to take root in bankruptcy. Over the past 20
years, mandatory bankruptcy mediation has become a feasible
alternative to traditional litigation of adversary proceedings. In
the beginning, creditors and debtors would mediate only if they
agreed to mediate. As statutory authority for court ordered
mediation strengthened, bankruptcy courts ordered parties to
mediate with more regularity. Presently, mandatory mediation is
statutorily authorized and bankruptcy courts have institutionalized
the use of mandatory bankruptcy mediation, especially in adversary
proceedings. The recent order by the bankruptcy court for the
Eastern District of Michigan for mandatory mediation in Collin
& Aikman Corporation's chapter 11 reorganization exemplifies
this growing trend of court-ordered mediation. 376 B.R. 815 (Bankr.
E.D. Mich. 2007).
This article presents an overview of the developments of mandatory
mediation of preference actions, following by a discussion of the
merits of mandatory mediation in preference actions in relation to
creditors, debtors, and the bankruptcy courts.
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Seth Meyer, J.D. Candidate 2010
No. 26, Vol. 1 (2009)