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The U.S. Bankruptcy Court for the Eastern District of New York is establishing a mediation program to assist in resolving disputes that arise in the course of a bankruptcy proceeding. The mediation program comes in the midst of a strong upsurge in the number of bankruptcy filings both locally and nationally. According to Chief Deputy Clerk Robert Gavin, bankruptcy filings at the Eastern District increased 13.5 percent from 2000 to 2001. Nationwide, filings have increased 19 percent over the prior year. As of February 2002, the Eastern District had 16,322 pending cases, divided among just seven bankruptcy judges. The upsurge is expected to continue, since bankruptcy filings typically lag behind a recession by 18 months. Eastern District Bankruptcy Judge Melanie L. Cyganowski said the increased caseload was a catalyst for the mediation program. But, she added, there is also a general consensus among judges that it is in the parties’ interest to be able to resolve their own disputes without the court’s intervention. “Mediation is not only less expensive but swifter and more certain,” she said, adding that these factors were often paramount in bankruptcy. Mediation programs are already in place in a number of other bankruptcy courts, including the Southern District of New York and the Central District of California. The court’s advisory committee collected and studied the rules at the other programs and then tailored them for the Eastern District’s caseload, which is more consumer-based, Judge Cyganowski said. As the program is designed, a controversy may be assigned to mediation either by the court, upon a motion by a party or by stipulation of all parties. The parties will then select a mediator and decide on fees to be paid, terms of the mediation and other details. The first conference must take place within 50 days of the order assigning the matter to mediation. There is no deadline within which the parties must complete the mediation. If the mediation is successful, the parties will submit a written agreement to be filed with the court. BECOMING A MEDIATOR Mediators for the program must be a member in good standing with the New York State Bar for at least five years; be admitted in at least one of the district courts in the 2nd Circuit; and have completed 12 hours of mediation training, among other requirements. The term of a mediator is three years. Judge Cyganowski said that mediation can help with myriad issues that crop up in the course of a bankruptcy, from cash collateral disputes that arise between lenders and debtors in a Chapter 11 proceeding to property settlements entered into in a separate divorce proceeding by the debtor in a personal bankruptcy. “The mediator brings something to the table that a judge cannot,” she said. “I cannot go into the merits of a dispute because if negotiations break down and the dispute goes to trial, I could find that I am biased by the information I learned during the settlement discussions. A mediator doesn’t have that limitation,” Judge Cyganowski said. Further information on the mediation program is available on the court’s Web site at http://www.nyeb.uscourts.gov.

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