COVID-19 has injected substantial economic uncertainty into countless businesses of every size.  The uncertainty has forced parties to review deals with essential business partners  and seek revised terms if possible.  Similar discussions are likely to continue for quite some time  as the economic fallout continues.

Such efforts reflect three of the Five Keys to Dealing Effectively with Disruption discussed  at the beginning of the crisis:  avoid denial, accelerate communication and appreciate cash position.   Some businesses seeking revised terms, however, have been unable to obtain needed relief.    For those confronting that situation, it is essential to remember the two other keys for dealing effectively with disruption:   (i) attack the problem and not the people and (ii) assistance — obtain it.

In particular, be prepared to understand all options for attacking the problem with the assistance of business minded solution providers.   While actual or threatened litigation may be possible, be prepared to understand potential consequences as well of  threatened or actual insolvency options.

Because time is money, deal making in insolvency is commonplace.  Most parties affected by a proceeding have a real economic incentive to reach resolution (subject to any necessary court approval) without the time, expense and uncertainty of litigation.   Of course, not every business dispute in an insolvency proceeding is consensually resolved — but business realities make resolution highly likely. 

Parties  at odds may find it difficult  to come to agreement directly on consensual terms — especially when operating in the unfamiliar waters of an actual or threatened insolvency proceeding.   For that reason, the use of third party neutral mediation has grown considerably in facilitating discussions.

That reality gives rise to a basic question:   if parties might ultimately find a solution in an insolvency setting  would it not  have been better for  those same parties to have attacked  the problem viciously in search of a  better  solution without the need for such a  proceeding in the first place?   After all,  any proceeding (including one on a pre-arranged or prepackaged basis) will consume precious resources and deplete value otherwise available for  a solution.

Many resources exist for those interested in finding effective solutions to difficult problems.  Dealing with distress is itself distressing  — but with the right tools and game plan it can be done.   Listed below are some resources about  dispute resolution and negotiation helpful in promoting solutions in difficult circumstances:

  • The Summer 2020 Edition of the New York Summer Dispute Resolution Lawyer  contains a variety of articles examining dispute resolution topics in the COVID era including some co-authored by Jeffrey T. Zaino  — who will be presenting to the American Bankruptcy Institute  Mediation Committee membership in mid-September on dispute resolution topics -details to come.   Other particularly interesting pieces were contributed by former ABI Mediation Committee co-chair Leslie Berkoff as well as Elayne Greenberg, the Assistant Dean of Dispute Resolution Programs and Director of the Hugh L. Carey Center for Dispute Resolution at St. John’s University School of Law. 
  • The American Bar Association Section of Dispute Resolution site contains a variety of resources of interest including the materials related to a LEAP (legal education, ADR and problem solving) — a much needed effort to integrate dispute resolution into law school curricula.
  • A few years back,  the ABI Mediation Committee collaborated on the book   “Bankruptcy Mediation” (which Leslie and I co-edited).  The book benefits from  a chapter contributed by Professor Greenberg as well as chapters contributed by others.  The book  remains  an excellent resource both for mediators as well as advocates and parties dealing with challenging issues in difficult situations. 
  •  MediatBankry is a blog maintained by esteemed insolvency practitioner (and former ABI Committee Member of the Year) Don Swanson who regularly produces interesting discussion focused on the use of dispute resolution in and out of insolvency situations.
  • Coming up virtually this Fall are opportunities for further exploring the role of mediation in solving problems.   One program will be presented by the Boston Bar Association and grew out of discussions with the COVID Task of the Bankruptcy Section.  The program is  provided as a service those representing consumers and consists of two parts.   The first session on September 10 will focus on the  basics of mediation.   That will be followed by a longer session on October 20  further exploring the potential use of mediation to benefit consumers facing difficult circumstances.  I am pleased to join both these sessions.  Details to follow and will be posted on the BBA website.


In sum, when dealing with a difficult business solution, ensure you are well equipped to assess all options for moving forward in the best manner.   There is a wide variety of endings to distressed situations — and it is important to fight smartly for the best resolution possible.