Insolvency mediation is a form of business mediation and an effective form of conflict resolution leading up to or after bankruptcy is declared.
Bankruptcy and conflicts
Many parties are involved in (the run-up to) a bankruptcy: the (possible future) bankrupt, directors and shareholders, the administrator or trustee, the supervisory judge, the banks, creditors and other interested parties such as insurers. They have conflicting interests and this frequently leads to conflict. Examples include issues concerning directors' liability, fraudulent restart, ownership issues, wrongful acts, performance or termination of agreements, financing and insurance and securities such as pledge, mortgage or retention of title.
The parties have a common interest in resolving a conflict as quickly as possible. This clarifies their position when filing for bankruptcy and progressing through its resolution.
Through insolvency mediation, a conflict can be resolved quickly and at low cost. Moreover, the parties choose a solution that is appropriate for them. Confidentiality is guaranteed. The supervisory judge does not sit at the table during the mediation, but must agree to the solution chosen by the parties.
Starting up insolvency mediation
Insolvency mediation can take place at the suggestion of the judge upon application for bankruptcy or the supervisory judge after the pronouncement of bankruptcy. Insolvency mediation can also be requested by the trustee (with the approval of the supervisory judge), the bankrupt and other interested parties.