Tag Archive: Impasse


To follow-up on my October post, “Could the NHL Lockout Benefit from a Mediator?,” as of Monday, November 26th, the parties reported an agreement to mediate.  Three neutrals from Federal Mediation and Conciliation Service have been assigned.  The sides met separately with the mediators on Wednesday, November 28th.

“Hockey players and management have not negotiated since last Wednesday [November 21, 2012]. The NHL has canceled more than one-third of its regular season, including all games through Dec. 14, the New Year’s Day outdoor Winter Classic and the All-Star weekend scheduled for Jan. 26-27 at Columbus, Ohio.”  NHL Lockout 2012: Federal Mediators Set To Join Stalled Labor Talks, The Huffington Post, http://www.huffingtonpost.com/2012/11/26/nhl-lockout-2012-federal-mediators_n_2194463.html#slide=1663482 (Nov. 26, 2012).

Although many may be satisfied with what seems like progress between the parties in agreeing to mediate in the first instance, others note that the mediation may not guarantee a successful end to the lockout.

Gary R. Roberts, dean and professor of law at Indiana University, and sports labor law specialist (and also my former Sports Law professor at Tulane), provides this take:

My guess is just based on past history and the tone of the way things are going right now is that this is probably not going to produce a settlement . . . . This isn’t like a hysterical couple doing divorces or a commercial dispute where one side or the other is just being totally unrealistic. These are two very sophisticated and experienced groups. I just don’t see how much a mediator can bring to the table other than to remind them of what’s at stake periodically. . . . Who knows how many seeds the mediator might plant that could eventually bear fruit . . . . It’s hard to predict. . . . Mediation tends to me a mechanism whereby tempers can be cooled, and people who are operating from unrealistic perspectives can be brought to see what reality is . . . . It sounds like they’re pretty much at an impasse . . . . Both sides have their perspectives and their objectives and neither side can accept a set of proposals that the other side insists is necessary. We really are at sort of a standstill.

Stephen Whyno, NHL lockout 2012: Reality is, mediation might not solve anything, The Washington Times, http://www.washingtontimes.com/news/2012/nov/27/nhl-lockout-2012-reality-mediation-might-not-solve/#ixzz2Dg1aKVWO  (Nov. 27, 2012).
“About $182 million apart on core economic issues, there’s further disagreement on matters such as contract length (players want none while owners want to institute a five-year limit) and arbitration rights.”
-Whyno (article link above).
Can a mediator bring them together?  What’s your take?
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Below is an outline of the basic mediation process and the potential order of events during mediation:
•Beginning the Mediation
• Mediator allows for introductions and sets forth ground rules for the mediation
•Opening Statements by Parties (“Stories”)
•Mediator reviews process of mediation, strengths-weaknesses/cost-benefit analyses for each party
•Caucusing— a useful tool to allow:
• The parties to tell their stories with assumed confidentiality
• The mediator to play the “Devil’s Advocate”
• The mediator to understand party positions and interests
• The mediator to address uneven bargaining positions
•Process/Actual Mediation (“Getting to Yes”)
•Separating the people from the problem
•Focusing on interests, not positions
•Inventing options for mutual gain
•Insisting on using objective criteria
•Resolution/Agreement
•Impasse
•More Caucusing
•Continued Mediation
•Stop Mediation

“A federal judge on Monday handed partial victories to both the Archdiocese of Milwaukee and the sex abuse victims who make up the vast majority of creditors in its bankruptcy.  The ruling, by U.S. District Judge Rudolph Randa, lets stand a February decision by U.S. Bankruptcy Judge Susan V. Kelley dismissing one victim’s claim and allowing two others to move forward, at least for now.”

Annysa Johnson, Judge lets archdiocese bankruptcy abuse ruling stand, http://www.jsonline.com/features/religion/judge-lets-archdiocese-bankruptcy-abuse-ruling-stand-1l7d86f-176360111.html (Oct. 29, 2012) (emphasis added).

_________

Post History

Archdiocese of Milwaukee Chapter 11 Mediation

  • UPDATE- As of Monday, October 15, 2012, it was reported that the mediation in the Archdiocese of Milwaukee Chapter 11 has failed.  Apparently, the estimated 570 victims and archdiocese were unable to reach a settlement.  The parties, however, have not provided any additional details regarding the reasons for the impasse.  As a result, the parties continue to pursue several pieces of litigation related to: (1) reduction of the number of eligible claims, (2) increasing the assets available to pay creditors, (3) the recovery of funds related to a certain cemetery trust created by the archdiocese in 2007, and (4) procedural claims–some of which are on appeal–regarding alleged venue shopping and to make public various discovery, which is currently subject to a protective order.

Sources:

Annysa Johnson, Milwaukee Archdiocese victims fail to reach bankruptcy settlement, Journal Sentinel, http://www.jsonline.com/features/religion/milwaukee-archdiocese-victims-fail-to-reach-bankruptcy-settlement-ii77put-174278861.html (Oct. 15, 2012).

  • The Archdiocese of Milwaukee, which faces more than a dozen civil fraud lawsuits over its handling of clergy known or alleged sex abuse cases, filed for Chapter 11 bankruptcy protection in January 2011.  Currently pending before the mediator, retired U.S. Bankruptcy Judge Randall J. Newsome, is the issue of whether an estimated 570 victims should be compensated, and if so, the extent of such compensation.  As of October 3, 2012, Judge Susan V. Kelley, who has raised concerns over increasing legal fees, granted a second mediation deadline extension to October 12, 2012.

Sources:

Annysa Johnson, Archdiocese bankruptcy mediation extended, Journal Sentinel, http://www.jsonline.com/blogs/news/172543611.html (Oct. 3, 2012).

Milwaukee Archdiocese, bankruptcy creditors to enter mediation, Journal Sentinel, http://www.jsonline.com/news/milwaukee/milwaukee-archdiocese-bankruptcy-creditors-to-enter-mediation-r960mvk-161244745.html (July 3, 2012).

Consider this scenario:

Critical Vendor  (“Critical”) has been doing business with Great Expectations Theater of International Talent  (“GETIT”) for over 20 years.  Actually, Critical has been in the trenches with GETIT since its opening.  Over the years, Critical has supplied dance shoes (i.e. ballet slippers, tap shoes, jazz shoes), leotards, tutus (similar to the multitude of taffeta and mesh skirts trending now), stage make-up, lighting, props and music (on cassette, CD and MP3 formats).  There was never a time when Critical could not meet GETIT’s supply demands.  For the first 15 years of the business relationship, GETIT timely paid every invoice and used Critical for all theater and production-related needs.  GETIT provided Critical with so much business that GETIT was always Critical’s top customer and frequently its only customer.  The owners of each operation also became close friends and often took family vacations together.  Their children were around the same ages and attended the same schools.

The last five years, however, have not been as copacetic.  You see, with the combination of in-home entertainment, the nearly bottomed-out economy and sundry reality TV options, audiences were no longer flocking to GETIT’s productions.  Sales receipts and annual memberships were down.  GETIT went from nightly shows and matinees on each weekend day to three shows per week.  Then, eventually, one show per week.  During that phase, Critical’s owner donated supplies, heavily discounted bills and offered to invest in GETIT, all to save the company she essentially helped to build for 15-20 years.  Plus, she wanted to help her friend, to whom she attributed much faith and loyalty, and could not bare to see GETIT collapse.  Even in light of her willingness to help, Critical’s owner was still a “savvy” businesswoman and often felt foolish for financially helping a friend’s company.  She knew that could be a significant mistake and could negatively impact Critical.  But she did it anyway, while periodically asking GETIT’s owner if she was contemplating bankruptcy.  GETIT’s owner always shrugged off such inquiries, but offered a trifling bit of reassurance, saying, “If I do decide to file, you’ll be the first to know.”

Turns out, Critical’s owner was not the first to know.  Indeed, she did not learn of GETIT’s Chapter 11 filing until she received a copy of GETIT’s petition and schedules in the mail.  Critical was listed in GETIT’s schedules and a related motion as a critical vendor with a sizable prepetition unsecured claim.  Although the practical benefits of retaining a critical vendor in restructuring and reorganization proceedings is to avoid the disruption of the debtor’s business, Critical wanted out.  Critical’s owner knew that her prepetition unsecured claim could be zeroed out, or at best, receive only pennies on the dollar.  If GETIT’s motion was granted, Critical would have to continue to meet GETIT’s supply demands.

Therein lied the dispute.  Critical heavily objected to GETIT’s motion to approve its proposed critical vendor status, which led to thousands of dollars of motions practice and litigation.  Prideful and equally humiliated, the parties refused to speak during the contentious time, but eventually agreed to mediation.

The bankruptcy court-approved mediator worked diligently with the parties to guide them to a resolution.  Upon the parties’ impasse on several occasions, the mediator continued the mediation and followed up with the parties after the failed sessions, which brought the parties back to the table each time.  Frustrations, anger and even rising prejudices by Critical’s and GETIT’s counsel, stalled each attempted mediation session.  Not to be deterred, the mediator took one last shot at getting the parties to a potential resolution and pondered what method or tactic might work best.  Finally, she believed she knew the true basis of the contention.

She went into a caucus, or private meeting, with each party.  In the caucus with Critical’s owner and counsel, she looked Critical’s owner squarely in the eyes and said, “I think what you are seeking from this is something deeper yet more basic and personal than all of the legal issues you all have tossed back and forth for months.  Tell me what that is.”  Critical’s owner peered back at the mediator; her eyes revealed the competing emotions of perplexity, anger and relief.  Finally, she said, “All this time, I just wanted GETIT’s owner to apologize.  She never said, I’m sorry.  She drug me into this.  I asked many times if she was planning on a bankruptcy and she gave me no heads up.  She told me she would.  I took her word.  Now, my business is on the brink of collapse, and she never even said, ‘I’m sorry.'”

At the end of the day, GETIT’s owner delivered the long-awaited words, “I’m sorry,” and the parties moved forward to an agreement.
So, what’s the moral of the story?  Sometimes, the legalities, the substantive law, bankruptcy code and rules are not enough.  Often, the “Golden Rule” wins out.  When faced with these types of circumstances as a mediator, or practitioner representing emotionally torn, humiliated and embattled parties, start with that rule first.  You’re likely to avoid the complexities of pride and prejudice.  Get it?

Let me know how you would you have handled this situation.

As of Monday, October 15, 2012, it was reported that the mediation in the Archdiocese of Milwaukee Chapter 11 has failed.  Apparently, the estimated 570 victims and archdiocese were unable to reach a settlement.  The parties, however, have not provided any additional details regarding the reasons for the impasse.  As a result, the parties continue to pursue several pieces of litigation related to: (1) reduction of the number of eligible claims, (2) increasing the assets available to pay creditors, (3) the recovery of funds related to a certain cemetery trust created by the archdiocese in 2007, and (4) procedural claims–some of which are on appeal–regarding alleged venue shopping and to make public various discovery, which is currently subject to a protective order.

Reading the new reports, it strikes me as ironic that this attempt at resolution and restoring peace among the parties, failed in a bankruptcy where the principal party involved is one that is frequently called as a mediator, or neutral.

What are your thoughts on why and how this attempted settlement and mediation failed?

Sources:

Annysa Johnson, Milwaukee Archdiocese victims fail to reach bankruptcy settlement, Journal Sentinel, http://www.jsonline.com/features/religion/milwaukee-archdiocese-victims-fail-to-reach-bankruptcy-settlement-ii77put-174278861.html (Oct. 15, 2012).

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