Bankruptcy Litigation Committee
Committees
Autonomy. Flexibility. Privacy. Cost Efficiency. Closure. These are some of the many reasons that parties choose to mediate. But once the parties agree to mediate, then what? Below are suggestions to help you maximize the value of mediation in bankruptcy cases.
A. How to Get the Most Out of Your Mediation
We asked our joint membership to respond to mediation-related survey questions in order to better understand the experience and to receive comments from the litigant’s and mediator’s perspectives. We would like to thank all those who responded to the survey. We received a robust response and are providing highlights to our joint membership.
This article by C. Edward Dobbs provides a detailed outline for party advocates and mediators.
Introduction
In June 2015, the Tenth Circuit Court of Appeals decided In re Alternate Fuels Inc.,[1] clarifying its position on debt-equity recharacterization in light of two Supreme Court decisions and further entrenching a circuit split on recharacterization analysis.
Section 510(b) of the Bankruptcy Code expressly subordinates claims arising from the purchase or sale of a security in the debtor or an affiliate to the level of equity. It thus functions as a form of recharacterization. Despite its broad scope, § 510(b) is relatively underused, making it a potentially powerful tool for creative debtors, committees and trustees.
Courts have held that bankruptcy courts have the authority to recharacterize debt to equity if the circumstances warrant such treatment. However, circuit courts are divided as to which provision of the Bankruptcy Code provides such authority. The majority looks to the court’s equitable powers.
Private-equity funds typically provide capital to portfolio companies through equity infusions and debt financing depending on the fund’s investment strategy and the needs of the portfolio company.
Mr. John C. Cannizzaro
Co-Chair
Ice Miller LLP
Columbus, OH
(614) 462-2700
Co-Chair
Ice Miller LLP
Columbus, OH
(614) 462-2700
Ms. Isley Markman Gostin
Co-Chair
WilmerHale
Washington, DC
(202) 663-6551
Co-Chair
WilmerHale
Washington, DC
(202) 663-6551
Mr. Mark A. Platt
Communications Manager
Frost Brown Todd LLC
Dallas, TX
(214) 580-5852
Communications Manager
Frost Brown Todd LLC
Dallas, TX
(214) 580-5852
Ms. Sara L. Abner, Esq.
Education Director
Frost Brown Todd LLC
Louisville, KY
(502) 779-8178
Education Director
Frost Brown Todd LLC
Louisville, KY
(502) 779-8178
Mrs. Dana L. Robbins
Membership Relations Director
Burr & Forman LLP
Tampa, FL
(813) 367-5760
Membership Relations Director
Burr & Forman LLP
Tampa, FL
(813) 367-5760
Mr. Jon Jay Lieberman
Special Projects Leader
Sottile & Barile LLC
Loveland, OH
(859) 912-1659
Special Projects Leader
Sottile & Barile LLC
Loveland, OH
(859) 912-1659