Disagreements between the city of Detroit and its creditors are leading the case to be scheduled for mediation hearings.  The city is the applicant for a Chapter 9 bankruptcy case, garnering headlines across the country as it is seen as one of the biggest cities thus far to encounter this level of financial problems. 

The bankruptcy judge on the case, Steven Rhodes, hinted that he planned to appoint Gerald Rosen as the mediator for the case.  Rosen is the chief district judge for the U.S. District Court in Michigan.  If the plan moves forward as planned, Rosen will be able to play a key role in determining the financial future of Detroit.  One of the biggest issues for the city thus far has been the unfunded pension liabilities, which has generated arguments between city pension boards and the Detroit emergency manager, Kevyn Orr. 

The case may proceed in a few different directions depending on the comfort level and direction of Rosen.  For example, Rosen can work directly with the involved parties to mediate disputes, or he might involve other mediators.  If other mediators are appointed for the case, the negotiating parties will have to split those costs. 

One of the biggest benefits of moving the case into mediation is that while any final agreements would be made public, the talks and details shared in the process of getting there would remain confidential.  Working through mediation would also help to relieve concerns about lengthy delays in the court process while allowing parties to create effective and customized solutions. 

Mediation meetings can be structured based on the needs of the parties in the meeting, allowing flexibility and ease of discussion.  A mediator is on hand to help guide the discussion and participate in solution ideas, but the overall atmosphere of mediation is generally seen as much less contentious than traditional approaches.