Mediating with the new Kid in Town

By Leslie A. Berkoff, Moritt Hock & Hamroff LLP

Mediation in the bankruptcy context can present a very unique situation as the party acting as the plaintiff in a contested matter may not necessarily be the business owner but rather a court-appointed party who is managing the litigation long after the debtor has failed. In these cases, the plaintiff has no historical knowledge of the facts, or underlying business arrangements, which relate to the dispute at hand; moreover, it is entirely possible that the parties with knowledge of these facts are long since gone.

Thus, the plaintiff has to learn all of the key facts at a time when there may be no one with first-hand knowledge to educate them. Can you successfully mediate with a new and unfamiliar party at the table? The answer is yes. The presence of a new party does not preclude the mediation from being successful. Rather, the replacement with a party whose primary obligation is to act as a fiduciary to minimise expenses, and ensure a reasonable return for creditors may in fact allow for a more expeditious resolution of the case.

In my experience, this new plaintiff is often able to survey the facts with more benign objectivity and call upon prior knowledge to resolve the matter. Moreover, they can analyse the pros and cons of the litigation risks that are before them and decide how to proceed. Overall, defendants should appreciate that an increased level of objectivity and financial accountability is brought to bear on the process.

Leslie A. Berkoff, Partner
Moritt Hock & Hamroff LLP, Garden City, NY, USA
T: +1 516-873-2000
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Leslie A. Berkoff is a Partner at Moritt Hock & Hamroff LLP where she serves as Chair of the firm’s Bankruptcy department. Ms. Berkoff frequently serves as a mediator, and is on the Mediation Panels for the Eastern and Southern Districts of the U.S. Bankruptcy Courts in New York and the U.S. Bankruptcy Court in Delaware, as well as the Commercial Mediation Panel for Nassau County.

Moritt Hock & Hamroff LLP is a full-service, AV-rated commercial law firm with 19 areas of practice and offices in Garden City (NY) and New York City.

published: October 2014

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