When first entering into the mediation process, it is not unusual for one or both sides to not have much faith that mediation will be able to solve the dispute. However, experience has shown that a skilled, trained, mediator, with knowledge of the industry, can help to bring an amicable solution to even the most adverse situation.
As reported in The Washington Business Review, the Marty and Dorothy Silverman Foundation (“Foundation”) is seeking payment of nearly $25 million for 31 acres of property from the University Heights Association (“UHA”) in Albany, N.Y. The UHA is a consortium of the Albany Medical Center, Albany Law School, Albany College of Pharmacy and The Sage College’s Albany campus, and is looking to improve the inventory of buildings on the four campuses as well as create a medical research hub and improve the surrounding neighborhood. The UHA contends that the $25 million in dispute were not loans that needed to be repaid and that the Foundation intended to forgive the payments. Foundation lawyers indicate that the UHA filed tax returns and financial statements in which it listed the payments as loans and that the loans are to be repaid.
The parties have been trying to come to a meeting of the minds that is acceptable to everybody, without success, for over three years.
After the filing of two lawsuits by the Foundation, the UHA attempted to seek Chapter 11 bankruptcy protection in a defensive move to protect association assets, but a Federal Bankruptcy Court Judge dismissed the filing as premature. State Supreme Court Justice Karla Moskowitz has ordered the two sides to try to work out their differences through the Alternative Dispute Resolution program in Manhattan.
While the parties are somewhat skeptical that mediation can help settle this longstanding dispute, both sides will give it a good faith try. The UHA indicated that the Chapter 11 could be refiled, depending on the outcome of mediation.
The Court will pick a mediator who is acceptable to both sides. The mediation process, which is anticipated to take between thirty and forty-five days, is non-binding.
It will be interesting to see if the mediation process can help these parties resolve their differences and avoid a costly fight played out in the courts.