Most people do not think about mediation when they think about bankruptcy. However, the courts do have a mediation program within the bankruptcy court. I am not sure if the Chrysler filing was sent to mediation given that the filing was somewhat pre-packaged at the behest of the US government.
At this point, 3 of the senior creditors are challenging the judgment of the bankruptcy court. They are claiming that junior creditors are receiving more than they are, bankruptcy laws were violated and that “TARP” funds meant for finance companies were illegally used to help Chrysler. Fiat, the company buying what’s left of Chrysler, has set a deadline for the sale to be finalized. The senior lenders have lost their appeal, but won a stay at the US Supreme Court. An adverse ruling from the Supreme Court could affect the pending General Motors bankruptcy. Each party to this transaction has something significant to lose and there are time constraints.
All of the parties to this case should get a mediator to find the win-win or the middle ground. And quickly.