Bankruptcy mediation promotes consensual settlements that help you save time and money. An experienced South Florida bankruptcy mediator like Francis L. Carter is a neutral third-party who can help debtors and creditors resolve their disputes in an amicable, equitable and cost-efficient manner.
Advantages of Bankruptcy Mediation
The overarching reality in bankruptcy cases is insufficiency. The assets constituting a debtor’s estate are only rarely sufficient to pay all creditor’s claims in full. Far more often even secured creditors are not paid in full, and unsecured creditors receive only a pittance. In the typical bankruptcy scenario, litigation is a costly and inefficient way to resolve disputes because a creditors’ legal fees and costs cannot usually be justified economically when compared with even their best-case prospects for recovery. To make matters worse the legal fees incurred by a debtor-in-possession, Trustee or Committee in opposing creditors’ claims have a first priority administrative claim against estate assets, which further diminishes the pool of estate assets available to pay creditors. As if asset insufficiency were not enough, litigation is a slow process, and there are at least two and sometimes three levels of appellate courts available to hear a case after it has been heard and decided by a bankruptcy judge. So from the parties’ point of view, in bankruptcy litigation one must pay full price to participate in a lengthy legal process that will rarely produce an adequate recovery.
For the foregoing reasons, bankruptcy disputes are particularly suitable candidates for resolution through mediation. Mediation provides an informal and confidential process for obtaining a quick and cost-effective final resolution of all manner of disputes that may arise in a bankruptcy proceeding. Mediation can be used to resolve objections to individual claims as well as objections to confirmation of a debtor’s plan of reorganization. It can resolve disputes as to amount, priority and validity of lien claims and other interests in property claimed to be part of a debtor’s estate. It can resolve all types of claims brought on behalf of a debtor’s estate, including avoidance claims to recover preferences and fraudulent transfers and claims to claw back pre-bankruptcy distributions to investors in Ponzi schemes. Mediation provides a speedy and cost-efficient way to resolve any disputes that arise in bankruptcy.
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