Peter C. Alexander, Pennsylvania State University, The Dickinson School of Law ADR/BANKRUPTCY SIMULATION This exercise introduces students in a basic consumer bankruptcy course to out-of-court workouts and to Alternative Dispute Resolution as a method of restructuring an individual’s finances without proceeding to bankruptcy court. The simulation involves one student serving as the debtor’s counsel and six or seven other students serving as counsel for the debtor’s various creditors. The group of students will work through the exercise together at a table and the grouping can be repeated so that all students can be involved in the exercise simultaneously. The development of this Bankruptcy/ADR exercise is discussed in detail in a law review article written by the late Professor Peter N. Kutulakis, Professor Robert M. Ackerman, and me entitled, “Integrating Alternative Dispute Resolution into the Bankruptcy Curriculum,” 102 Dick. L. Rev.259 (1998). The simulation revolves around a Russian immigrant, Ivan, who finds himself in financial distress following a series of unfortunate personal downturns. Ivan would like to structure a payment plan to repay his creditors and avoid formal bankruptcy, if possible. However, Ivan has made various promises to those creditors and they have varying expectations of Ivan. The simulation tries to mirror real life in that the students are given only the information that is directly relevant to the representation of their respective clients. The students who represent Ivan, the debtor, are given a more complete set of facts, but not the specific fact sheets that are given to the various creditors’ attorneys. Pedagogically, the simulation uses a group learning methodology and succeeds only if the students prepare in advance of class (because each member of the simulation will be relying, in part, upon the preparation of everyone else in order for the group to be able to work through the exercise and to reach a solution that is satisfactory to all of the participants). The exercise provides an opportunity for bankruptcy students to practice the various roles that an attorney might be called upon to assume in the broad spectrum of ADR processes. In the first part of the exercise, students representing Ivan are required to combine knowledge of bankruptcy law, effective communication skills and appropriate negotiation techniques as they convene a meeting of creditors. In the first half of this meeting, the students are advocates for their respective clients, trying to determine just how much money Ivan has available to distribute to creditors. Once the parties have reached consensus as to how much money will be distributed, then Ivan’s counsel becomes a more-or-less impartial mediator, employing listening skills, an understanding of the elements of the mediation and facilitation processes as s/he assists the creditors’ attorneys in developing the payment plan. Throughout the out-of-court workout, the parties are aware that bankruptcy-both voluntary or involuntary-might be looming. As a consequence, the students must be mindful of key bankruptcy provisions as they work through their ADR session, i.e., the requirements for involuntary bankruptcy , preferences, fraudulent conveyances, and which type of bankruptcy Ivan will likely file. The handouts for this simulation consist of eight client statements, a “Notice of Reorganization in Lieu of Bankruptcy,” and a Statement of Income and Expenses and Assets and Liabilities. (All of the handouts are reprinted in the law review article discussed above and a copy of that law review article is being attached to the copy of this proposal which has been sent by first-class mail. The simulation is designed to take two class sessions to complete. However, it is possible to complete it within one session, if the students have engaged in substantial advance preparation. The exercise also serves as an excellent review of all of the important consumer bankruptcy concepts.