Eagle1993

Very long document, but I'll try to simplify. 1) Most of the claimants are older. Older people don't get big settlements in sex abuse cases. 2) Most of the accused are only accused once. Bigger settlements come in when there are accused with multiple victims. Why? Because BSA liability would be less and more liability would be on the victim's parents, others, etc. So ... when adjusting for these factors, the analysis shows the average value of each claim times number of claims leave them at the settlement amount.

Boy Scouts Says Abuse Claims Likely to Be Paid in Full, With Lowered Liability Estimates - WSJ Prof. Jacoby says there are two issues with BSA's statement: 1) Valuation ... is BSA correct in their valuation? 2) Trust administration ... even with a $3B trust (if it hits that number) there are trust admin fees and costs that means that $3B will not all go to claimants.

This is a very good point. Will the TCC be allowed to release all of their data by council? TCC has held that back, I think due to mediation privilege. Also, is the detailed Claro assessment on the docket? I haven't seen that either. I found it odd that BSA would publicly release this analysis. I had a chance to read most of it last night and mentioned where I think it falls apart when they use prior settlements. However, I do agree that it presents the insurance side of the equation. Perhaps making all of this public to non mediation parties may be fine. Generally, I fully support transparency. However, this back and forth doesn't look healthy and BSA lawyers seemed to go all in on this plan. I was very hopeful last week but now am concerned they are planning on spending months in limbo land. BSA has already raised fees substantially, it is getting to the point where it will hurt recruiting. It is likely any plan will drive the organization deeper into debt and take more money from councils. I really hope White & Case know what they are doing. I am still hopeful that we are just seeing a part of the back and forth as right now as from what I see, I don't see these sides agreeing on what to order for lunch let alone a multibillion dollar settlement.

I don't think BSA cares; however, here is what they put in the plan. Why? Green is well connected to BSA's law firm. The Coalition is clearly the group trying to get the plan passed.

When I read this I see it as having several audiences. First is Judge LSS as a real attempt to keep the current plan/vote alive. I don’t know how feasible that attempt is (it feels a bit like a Hail Mary at halftime of a football game). It probably won’t work but doesn’t hurt. However, I also see this document as a negotiation tactic to set a starting point for the next round of negotiations. It balances out comments from the TCC to ensure BSA’s position is known publicly. My main problem with the analysis is there has never been an organization that went to court to defend 80,000+ sex abuse cases. To try and discount case after case because the victims are now older or the accused are volunteers would be difficult to argue with 84,000 claims. At some point, a jury could say that there are major systemic issues that the organization should have been aware of and thus give BSA and related entities most of the fault and big payouts to survivors. Bates cannot simply look at each individual cases anymore. Now I grew up in the 80s/90s and understand those who argue many of these cases occurred in a different time and it was a societal problem, but the reality is a jury today would likely crush the organization with this many claims. There is a chance that next week the judge will say while the vote wasn’t a home run it was good enough and let’s go to confirmation. Perhaps she is doubtful the trust can grow, believes Purdue ruling is garbage, and sees this plan as the only path for BSA survival. On the flip side, would she want to be the court that sets a low bar for allowing 40,000 non debtor releases over the objections of the TCC and DOJ? Would she want to have this case kicked back to her due to issues found in appeal? Someone mentioned tea leaves. I think the tea leaves are her ignoring requests by the DOJ to restart voting due to plan changes and allowing the confirmation schedule to be delayed. I’ve seen in the past where she ignored some major concern as she knew it didn’t matter based on how she was going to rule. So, in this case, if she thinks this plan in its current form is doomed, keep the vote on schedule, ignore the DOJ objections (as it doesn’t matter) delay confirmation (as it doesn’t matter) and send the sides back. Just a guess…

I believe many COs filed claims and fall under Class 9. It could be a ballot to vote.

What a great story! If only we had invention merit badge still ... I tend to think he could be one of the few to earn it.

Sorry to hear the news but your attitude is great! I hope you do find a unit to help out as any unit would greatly benefit from your support!

To me, good call by the judge to hold a hearing right after the final vote tally. Note that I don't believe this is good news for the current plan. If there were no issues, the judge would likely have skipped the meeting and let confirmation to go ahead as planned. I do think this is good news for all sides that the judge will not let something fester without stepping in and providing some sort of guidance.

Status hearing set. 1 day after the final vote to be tallied. 9d224c6c-9bc1-4eec-98e9-c99d2f8ce961_8250.pdf (omniagentsolutions.com)

During the RSA hearing, this was one of the items the judge threw out as not acceptable. BSA put it back in anyways and said further arguments during the confirmation hearing. I would be shocked if it stayed in based on JSS's initial comments. For the BSA, I doubt they care if the Coalition is paid off in the end. It was the offer that was needed.

Just to clarify how big this document is .... BSA's law firm initially said that claims are worth up to $7.1B ... now BSA's law firm is saying <$3.6B. It is meant to counter the TCC's expert witness who is saying claims are worth $24 - $30B ... on the low end. There is a major disconnect on the value of the claims. If this is now becoming a bottom's up exercise (vs an ability to pay exercise) then I would think some non bankruptcy court may need to decide the answer. BSA has initially been focused on top down allocation ... this is the max National can pay. This is the max LCs can pay. Etc. This document has seemed to change their argument completely. Now they are saying ... this is the max claims are worth in total. Note that I know they had a spread in the past ... but the mean and upper end of that spread exceeded their ability to pay (even when including LC assets). Now it doesn't when including LC assets.

To me, if JSS has major issues with the voting results, she needs to provide feedback next week. If she believes the voting result is sufficient to confirm, then I support her in letting the confirmation process go forward. She is far more experienced in this than any of us, she knows the law and she should be able to make a decision next week if the vote was sufficient. What I would not want to see is JSS making a ruling in March that the vote was not sufficient to confirm the plan. Now, if she is ok with the vote but has issues with the plan, that should come up during the confirmation hearings.

I've seen this on both sides and it is annoying. These are high paid and experienced law firms, so I expect they believe it does have some impact, but I expect JSS is pretty good at ignoring those parts of the filings.

That is exactly what I saw; however, I wasn't able to read the whole document yet. Also, when they were 60% liable .. many times COs were the other liable party but they never included that value in the settlement. However, in this case, they are including CO coverage. So that is part of the reason I question the valuation they are using. Personally, I think they are much better off arguing that $2.9M is the most they can pay. Arguing $2.9M is full compensation for 82,500 victims of child sex abuse is a much, much harder pill to swallow and one that will likely make it tougher to get people on board a plan. They purchased the coalition support by offering them $10M + $900K/month plus running the settlement trust.

The official Omni eballot or coalition's? What is odd to me is that the coalition created an eballot but yet all of their votes are direct? It just seems odd. Probably a good question is if the coalition discussed use of master vs eballot with BSA at all. If the coalition collected votes through their own eBallot then submitted them as individual ballots ... that is no different than a master ballot as both are coming from the law firm, not directly from claimants. Note that this is fine and acceptable, but if BSA or TCC questions master ballots they should also question firms that submitted direct ballots for their claimants. I agree that there could be legitimate questions about the master ballots from anti plan firms. Why am I not shocked that voting once again comes up as a mess when discussing the BSA?

BSA went hard after master ballots. I think it will be interesting when Omni responses to discovery about what they listed as master vs direct ballots. I wonder if the direct ballots all came directly from individuals ... or did coalition law firms send them directly as individual ballots to try and allow BSA to reject master ballots? To me, a direct ballot was one where an individual either mailed directly or went to Omni's site and filled out the form directly. If a lawfirm was involved in either (by a lawyer filling out the ballot or sending an individual ballot on behalf of a claimant) ... then there is no difference with a master ballot. It looks like BSA is going to try and disqualify reject votes by disqualifying some of the master ballots.

I have not seen anything on the docket yet. I've never watched a bankruptcy so I'm not sure if judges typically ignore requests like this, really looking at the debtor to run the show. Perhaps she thinks ... if the debtor wants to spend the next 5 weeks spending money on a plan that will fail, that is their call. OR ... perhaps she is going to say 66% was her target, this was very complex, minor tweaks plan & approve it? My best guess (based on no experience in this area) is that she wants to avoid any debate about preliminary vs final vote. We are only 6 days away from seeing the final vote. So, she may sign the order and set a status hearing sometime mid next week if the vote remains ~73-74%. That way, she could order sides back to mediation after getting a clear/final vote tally. Could you imagine if she essentially killed the plan/held up progress this week, only to see Omni come out next week with 85% approval. So, perhaps she is just being cautious until the final vote. Just a hunch....

Similar for my council. For Scouts BSA, less of an issue; however, would definitely impact camporees ... so definitely a negative impact but perhaps managable for strong Troops. For Cub Scouts, losing local council camps, can kill their camping program. What I was told, for Cub Scouts, is the idea of buying a large warehouse location that could be used for scout offices and a Cub Scout camp (indoors). Indoor tents?, climbing walls?, trout pond? Not exactly sure as it was a rumor.

#1 - You have to watch their wording carefully. They said the plan, as written, does not comply with bankruptcy law. However, they do not say you cannot have non debtors included. While they didn't come out and say it, I believe this came up previously. They may look for a LC by LC, CO by CO release. So each individually must buy into the settlement. It is not clear, but some have argued that you then need the funds from the LC or CO go to claimants from that LC and CO and voting is confirmed by LC/CO. Again, this combines objections from various law firms so may not be the final plan. #2 - That is true and Kosnoff even admits that. However, if Kosnoff and others who want to see a CH7, are able to get enough claimants to reject every plan, one could imagine that BSA abandons CH11 efforts and files CH7. This is not TCC's strategy. #3 - YES! BSA does claim that however TCC hired a pension board expert that says BSA's analysis is flawed. You will see pension insurance come in with a request and be given much less than their ask. Pension board is an unsecured creditor and will battle with claimants. This is not a black and white issue and is something that is debated. I have no idea who is correct but can see based on various court documents that TCC has hired pension experts.

Just a reminder where we are in terms of schedule. The TCC asked to have a status hearing Jan 12 or sometime soon but so far no response from the JSS. I think the big date will be January 17th. Perhaps Omni made some major errors that could swing the vote %. I wonder if the judge will wait until January 17th, see the final voting report and then utilize a status hearing to provide tea leaves as to where this plan stands. Dec 29 Deadline to serve discovery on voting, settlements Jan 4 Preliminary voting report Jan 5 Rebuttal expert reports due Jan 7 Deadline to serve responses/objections to voting/settlement discovery Jan 14 Document production regarding voting/settlement due Jan 17 Final voting report deadline Jan 28 Deposition of expert witness & fact witnesses due Jan 31 Deadline to identify trial witnesses Feb 4 Plan objection deadline Feb 10 Deadline to exchange depositions designations and file motions Feb 14 Confirmation brief/plan reply deadline Feb 15 Deadline to exchange deposition couter-designations Feb 17 Deadline to submit joint pretial order, witness/exhibit lists, options to motions, etc Feb 18 Final pretrial conference Feb 22 Confirmation hearing

This is in part why I don't think LCs can count on the ability to just hide all their properties over the next 2-3 years to add restrictions and protect them from bankruptcy. These properties are all now clearly documented. There is a BSA document indicating which are currently unrestricted. It is clear most if not all of these councils are at risk of bankruptcy. To try and shield them will be tough. Now, if they want to take loans out, sure. They can sink them down to 100% debt but at that point they have liquid assets that are unrestricted. This is what national did to their HA bases. However, national, when they leave bankruptcy, will be 100% in debt on all their HA bases. This is part of the reason they are greatly increasing their fees over the next few years ... just look at Philmont. Perhaps you can do that with HA bases, but to expect to do that with the majority of 500 council camps, most of which barely break even each year is a fools errand. I personally hope all LCs can find protection through this bankruptcy. Having a decade of individual LC lawsuits will be a disaster for the BSA. We will lose far more camps, see fees increase more, see donations drop more if we go down that path. Even if councils need to kick in more right now ... which they will ... I expect it is a better long term strategy. We will see.

What can the status hearing provide? I would think, at minimum, the judge could indicate if the % accepted votes is going to be enough. I do remember a prior hearing where the judge remarked about a section of the plan where she said something along the lines ... I marked up that section a lot and have a lot of concerns, we will address during confirmation ... so perhaps some tea leaves there?

I’ll add that I disagree with this, not that it matters. I believe that if you get the major law firms on board along with the TCC you can get to 90%. However, there is a risk of permanent hold outs. Zalkin agrees with TCC with the need for a status hearing. They mention that further review of the votes will actually make the vote appear to fail even more. Their major objection is the 40,000 Charter Orgs and their insurance that is covered saying there is no subject matter jurisdiction to allow it. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/e7b1fd8f-7af9-487c-8e48-f0e4d5c1c824_8210.pdf

I think that is part of Kosnoff’s point which is why he says it will end in Ch 7.