Arbitration presents itself as another dispute resolution tool, although it is hardly utilized in bankruptcy cases. In a co-authored article, Managing Partner Howard Ehrenberg and Associate Claire Wu discuss why arbitration is a great route for both parties seeking to reach a mutually agreeable resolution other than litigation.
Many debtors believe arbitration is not available to both parties within the confines of a bankruptcy case. When determining the enforcement of arbitration provisions, the U.S. Supreme Court relies on the McMahon standard and uses it as a starting point in making its determination. If a bankruptcy court rules an arbitration provision is not enforceable, both parties are still eligible to submit the matter to arbitration.
“Bankruptcy courts addressing this issue have historically distinguished between core and non-core proceedings in order to determine whether there is an inherent conflict with the purposes of the Bankruptcy Code. More recently, however, this core/non-core distinction has been found to be relevant, but not alone dispositive,” wrote Ehrenberg and Wu.
Read the full article here.
