Eagle1993

I don't think this will happen. But, if Ch 7 occurred.. All assets (essential HA based and Trademarks including Eagle) would be sold to the highest bidder. This includes all merit badges and program materials. I could see a "new national" BSA form who would buy most of the trademarks and materials (but not HA bases). Then scouting would proceed. The most likely path for BSA is that it is going to get very expensive regardless of Ch 7 unless they start getting big donations and large increases of youth. I wouldn't be surprised to see scouts Canada fees ($150/year), HA bases charge $2K+ for 7 day trips and summer camps head towards $600+ for a week. BSA will exist, but if our course doesn't change it I fear it will be for those that can afford it.

I believe this was added to the plan to make sure BSA didn't low ball their business plan to get out of paying more to the settlement. So, if BSA high adventure attendees exceed plan, I believe the have to pay $150 per attendee. Similar to registered scouts, if they exceed the plan they own $50 per scout. I'll see if I can find that section in the plan...

Very good point. I don't think the Guam claimants can disrupt this much. However, if Century pulls out then the plan is dead. Tanc made an ominous appearance just before the zoom call ended. There is one piece that is being discussed that Tanc indicated was critical to not change materially. The judge went back and forth with Tanc and she said as long as it is consistent with the plan she is fine.... and Tanc seemed to agree. However, it was a bit disconcerting. I still think 99% chance this is approved and agree, it should have been done tonight.

Next steps ... order has some very discrete changes & process will be quick. Guam claimants will have some time to review and will be served. Status conference to be setup next week Wednesday; however, unlikely needed. If needed, will be very short and zoom only (save BSA$ on travel). So, expect plan approval Wednesday/Thursday next week (or earlier). Judge ... "interesting case".

Almost done. Lujan giving it one last try, attempting to score 12 runs with 1 swing of the bat. She should have settled back in 2019.

One point of that $80+M of cash + the $63M reserved for JPM. Based on the plan, as soon as it is effective (post appeal) BSA must pay all by $25M or so of their cash/non restricted assets and a big chunk to JPM. So, I expect most of their current cash will go away and be paid out post effective date. They also state they will get a $48M loan from the foundation to survive after they pay out most of their cash.

Correct. BSA is directly paying their lawyers, TCC lawyers, Omni, consultants, Trustee, etc. The only people they are not directly paying is individual claimant counsel (and actually some of them are attempting to get paid from the trust directly).

What is key is really Exhibit F. In the end, as long as local councils in total provide $500M in cash & properties + $125M note they are free and clear. If they miss this by $1, no council will have any protection. There is a breakdown of donated property; however, that is subject to change if they provide cash vs property. I think if they sell property, they are supposed to notify the court. However, I know places are being sold and it seems like those concerns are no longer present as there is the $625M settlement agreement. So, basically, BSA will need to herd the cats and ensure all make their contribution.

Not an expert but one reference is Purdue as it is another complex bankruptcy case. The latest plan was approved March 9, but there has been on appeals ruling yet. Also, that one already went through District which took 2 months. So ... if similar ... 8+ months? Just attempting to ballpark this comparing to a similar case. I know district on Purdue took 2 months and that was considered very fast (and they rejected the plan). So, in Purdue, they are 1 year past their original plan confirmation date. So, it is very possible we are talking 12+ months, but my hope is closer to 4-6.

Hearing has started and ongoing. It seems clear the plan will be approved; however, some minor changes will be required (at least so far). It could take a few days as they need to notify some other parties of changes. This will not go into effect until post appeal approval (so even after the plan is approved, BSA and others agreed it isn't effective immediately). That also means BSA cannot say appeals are moot as they already implemented th plan.

Big change in BSA's financials. 17c7637d-c326-4612-9685-10cfeb89a4f0_10280.pdf (omniagentsolutions.com) They transferred their entire Unrestricted RBT Balance to cash. So, their cash went to $83.65M; however, their RBT Balance is now at $0. The RBT is their "Retirement Benefits Trust". They also state they have $63M additional in cash set aside to pay JPM as they exit. Their bankruptcy fees dropped (which is a bit odd). THey showed a decrease of $5.9M in professional fees. Total is now $362M.

It looks like USA Gymnastics had costs in the range of $20M ... tough to really see. Their settlement was 380 so cost was about 5% of the total settlement.

BSA's involvement will drop way off if the plan is confirmed. They will have to still cover the cost of sending it to district and perhaps some appeals but I expect those costs will be far less than their $13M+/month they have been averaging. If all goes well, my understanding is 2 months for District approval (December) and perhaps several months after for appeals. Now, if the Purdue appeals court overturns their bankruptcy case BSA's plan could be in trouble. All the trust costs come from that fund, not the BSA. The settlement trust will pay those fees. I understand that varies. I have heard anywhere from 33-50%.

$368M isn't the total fees. Don't forget that every claimant that has a lawyer will pay a large portion of their claim to them. In addition there are large bills that have yet to be decided from the Coalition. $368 is simply the direct bankruptcy costs paid by BSA.

No breakdown from what I could see.

I think it is really tough to say. If you look at the few years prior to bankruptcy, BSA lost: $22M in 2019 $58M in 2018 $41M in 2017 However, these were not cash statements. In addition, BSA has changed a lot since 2019. I expect they will exit bankruptcy with <$20M in the bank (as bills are still coming in). Who knows the backlog of work they have and what payments they face on their debt as they exit bankruptcy. I don't envy BSA leadership, they have a tough slog ahead.

Note that as of end of June, BSA had $32M in cash in the bank. They started with $117M and $55M (endowment) so burned through $140M of cash since Feb 2020 (through June 2022). Assuming plan is approved Sept 1 (or shortly thereafter) and confirmed ... they are looking at $400-$500M of debt and $30M in the bank. I expect their debt to asset ratio to be 1:1 at best, I believe they have Sumit worth $300M+. BSA will need a huge injection of cash plus look at fee increases. They need to get off the edge of Ch 7 fast. I know no one is happy, but if BSA went over that Ch 7 cliff (which it was probably to) then all of the insurance settlements and councils would abandon the plan. There would be very little payouts to anyone and claimants would have been stuck with suing individual councils and COs. I expect some claimants would have fared a bit better, but the vast majority would likely end up with little to nothing. Graphs.pdf

Based on end of June, I see: Approved to date for bankruptcy: Professional Fees : $240M US Trustee Fees: $2.5M Other Reorg Expenses: $125M Total Bankruptcy Expenses: $368M (OUCH) ... you can almost buy a nice camp for that Further Breakdown: Debtor Professionals - $148M Committees & Mediators - $84M 79443f84-dbaa-4574-838d-8d9810da69d8_10142.pdf (omniagentsolutions.com)

Several claimant representatives and certain insurers filed objections to the revised plan. The certain insurers had the most comprehensive set of objections and included recommended revised language. It appears the fight is really about Dr. Bates and his estimate. Essential the BSA, TCC and Coalition are attempting to say Dr. Bates is correct to allow plan confirmation but we expect he will be wrong so we want the court to confirm the plan saying it is 100% funded but also confirm the plan saying the trust isn't bound to that amount. Certain insurers are basically laying the groundwork to say the plan is funded so leave us alone. They call out the TCC a bit as the TCC didn't object to Bates. The other points are around language that was changed that goes beyond the opinion and language that wasn't changed that must be. Hearing Sept 1.

I'll add that I do not believe having a non contributing CO negatively impacts you in the matrix. However, I expect we will learn more once the trust is officially setup and starts processing claims.

Our District Klondike is probably the best patrol method event of the year.

Actually, they already have the impact in the plan ... took me a while to find it. So basically, if they don't make good in 3 years and pay the $27.5M, they will no longer be protected and can be sued directly by abused. They are expected to pay $2M within 180 days, $25.5M in 3 years and keep $2.5M reserved until year 6.

If the UMC does not pay, I expect the Trust will sue the UMC. They would sue for the $30M plus interest, court costs, etc.

Prof Jacoby had a quick summary of the 20 minute hearing yesterday. No survivors spoke nor their attorneys. DOJ didn't speak. BSA plans to seek district court approval as they believe that is needed given the releases. Non settling insurers will likely appeal. More from Reuters. https://www.reuters.com/legal/litigation/boy-scouts-insurers-prepare-appeal-bankruptcy-settlement-approval-2022-08-18/