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Commercial Transaction: Late Case, Post-Discovery Mediation

Issue:

How did a foreign manufacturer and its American subsidiary efficiently resolve a dispute as to the terms of their separation and avoid proceeding to a time-consuming and costly arbitration hearing?

What Happened?

A foreign manufacturer of custom molds and presses retained an individual to form an American subsidiary.  While the subsidiary was successful in establishing a local presence and developing business in the domestic automotive market, its relationship with the manufacturer subsequently soured following a change of ownership in the parent company and changes in personal relationships.

Special Considerations:

  • Both parties genuinely wanted input into how the severance of their business relationship could be structured.
  • The dispute between the parties became a distraction, resulting in the disruption of services to customers and threatening to jeopardize that ongoing business.
  • Because the parties had already spent a considerable amount on legal expenses between them, including fees for three international arbitrators and a protracted discovery process, they were now eager to “stop the bleeding.”

How Did PREMi Help?

After contacting PREMi in the hope of achieving a speedy resolution, the parties were given a portfolio of qualified mediators from which to choose, and mutually agreed on their selection.  The PREMi mediator:

  • Familiarized the parties with mediation, making them comfortable with the process and explaining what was required of each party to make it work
  • Held joint and separate meetings with the parties and devoted the time necessary to explore the strengths and weaknesses of their respective fact- specific claims
  • Encouraged meaningful discussion between the parties by focusing on the mutual advantages of resolving their dispute

What Was the Outcome?

As a result of a truly collaborative environment fostered by the PREMi mediator, the parties left the mediation conference with:

  • Mutual agreement regarding a final resolution of the dispute
  • A written and signed preliminary agreement summarizing the key terms of the settlement, which they finalized in writing within two weeks
  • The promise of an orderly and cooperative transition of business, equipment and employees that would preserve customer relations

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Disclaimer: This summary is illustrative of the types of cases and the manner in which the PREMI associate dealt with the matter. Care has been taken to avoid disclosure of sensitive or confidential information.