Eagle1993

24 minutes ago, T2Eagle said:

I don't know how many congregations actually filed as claimants, but it could easily be 2000 -- 3000, that's a lot of yes votes.

They are in a different claimant class.  Each claimant class has to vote yes, by at least 66%.  UMC churches votes would not be counted with the sex abuse survivor votes.  I believe they would fall under general unsecured claims, but  perhaps convenience.  They will definitely not fall under direct abuse claims which will likely decide the path of this bankruptcy.

• 2010 Credit Facility Claims 
• 2019 RCF Claims  
• 2010 Bond Claims 
• 2012 Bond Claims 
• Convenience Claims 
• General Unsecured Claims  
• Non-Abuse Litigation Claims  
• Direct Abuse Claims 
• Indirect Abuse Claims  

This topic is to discuss the legal bankruptcy case against the BSA.  

The 2nd amended, 5th plan is currently going through voting of all parties.  The current plan can be found here:

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/b69d49f8-8dab-4023-9ab9-ba341c6340d2_7832.pdf

Voting is currently underway by each of the claimant classes below.  The expectation is that each class must approve the plan (>66% of votes cast must say yes) for it to be considered.  Most of the focus will be the "direct abuse claims" which total around 84,000 and the primary focus of the bankruptcy plan.  

• 2010 Credit Facility Claims Impaired 
• 2019 RCF Claims Impaired 
• 2010 Bond Claims Impaired 
• 2012 Bond Claims Impaired 
• Convenience Claims Impaired 
• General Unsecured Claims Impaired 
• Non-Abuse Litigation Claims Impaired 
• Direct Abuse Claims Impaired 
• Indirect Abuse Claims Impaired 

Once voting is complete, the court will review the vote, go through various objections and if still ok, start plan confirmation hearings.  Current timing indicated plan confirmation hearings would start February 22.

For an overall guide to various bankruptcy topics, go here:

https://www.scouter.com/topic/32827-bankruptcy-topic-guide-stop-here-first/

Ok .. I'm going to freeze this topic and create a new one.  130 pages is more than enough.  Here is the new thread.

FYI ... I moved a few comments to the other thread to keep this one focused on the legal aspects of the bankruptcy.  Link below.

4 minutes ago, johnsch322 said:

The bigger question would be why was he allowed into the BSA to start with?

This is venturing far from bankruptcy so we may need to move some comments.  This is a very limited screen shot. Who knows.  Perhaps by pervert they mean gay.  Perhaps the first incident BSA became aware of, they put him on this list.  Would need more info to truly know.

11 minutes ago, MYCVAStory said:

Judge grants a month delay for the confirmation hearing.  Hints that "other legal issues" need to be considered and will allow parties to request that they be addressed.  In other words, she will consider the third-party release issue at the start of a full confirmation hearing.  Voting deadline will NOT be changed.  She'll address any Survivor who wants to change their vote, on an individual basis, but wants to see the vote total first.   New date is February 22 for confirmation.

The judge has been very reluctant to delay this hearing … 

I also think it’s interesting she wants to see the vote.  My guess… if it is not near 95% approval she kills this version of the plan.  Every case I am seeing with large claimant classes seem to get to at least 95% and even then sometimes the plan is rejected/changed.  

Judge indicated she read Purdue ruling and corrected the Hartford lawyer who quoted the judge incorrectly (about a prior ruling).  Sounds like she didn’t tip her hand based on what I am reading.  

BSA says the plan is completely dependent on non debtor releases … no surprise and they are correct. 

Patterson a lawyer for Zalkin who sounds like specialized in bankruptcy said this is now becoming or is the most complex bankruptcy ever and the channeling releases go farther than Purdue. 

Insurance companies indicated they won’t release payments unless they have releases for LCs and COs. 

31 minutes ago, qwazse said:

Especially if folks see some of those funds being dispersed or put to productive use.

What do you mean by this?  The $100M does not go to BSA it goes to claimants.  What does productive use mean to you?  Checking to see how claimants spend their money?  Just a bit confused.  

I doubt anyone contributes much to a claimant fund.  I have very high doubts they come close to $5M.  People interested in BSA will more likely donate to the BSA not the fund. Fundraising would get reallly messy.  

11 minutes ago, johnsch322 said:

So what happens if they do not reach the 100 million goal?

Nothing.   

UMC just offered $30M.  They also agree to work on YPT and help fundraising with councils to hit $100M more to the settlement.  

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/72e4dc04-9e45-4184-abc7-cd8c5c6595b3_7884.pdf

3 hours ago, fred8033 said:

Will criminal charges affect the lawsuit?  Would insurance companies use a criminal conviction or trial as proof that the damage was not covered? 

BSA's current insurance is general liability; not covering criminal acts.  BSA site:   "The general liability policy does not provide indemnification or defense coverage to those individuals who commit intentional and criminal acts. The Boy Scouts of America does not have an insurance policy that provides defense for situations involving allegations of intentional and criminal acts."        https://www.scouting.org/health-and-safety/gss/gss10/

I'm not sure what past insurance was like, but I would expect the policies would be similar.  Also, I'm not sure if BSA is still insured or if it's just the individuals.  ... I find I only understand insurance after-the-fact.
 

Unless they charge Scout Executives I doubt it.    In the past, with respect to the Catholic Church, and the Mich AG has targeted the actual individuals not leadership.  In addition, this is a small number vs the claims.  

Purdue Pharma now officially being brought up on the Docket.  Note that there will likely be a new case to reference soon as another District Court blasted nonconsensual non debtor releases (calling them nonsense).  

00ea8d61-4406-4e26-8710-51a7af2d0ee0_7863.pdf (omniagentsolutions.com)

The TCC is asking the judge to not delay confirmation, other than allowing 1 more week for discovery.  ... Note that if the TCC thought this was headed to an approval, I bet they would want to delay confirmation hearings.  This may be a sign ...

The TCC is asking the judge to have a two step Confirmation.  The first step is to review the bankruptcy court's ability to issue protection to non debtors.  They reference various cases including Purdue Pharma.  Basically, the TCC would like to court to rule on this first as if the court decides they cannot issue 3rd party releases (either at all OR without major modifications) then there is no point to continue the confirmation hearing.

Quote

If the Court determines that it lacks the authority to approve the scope of the releases and grant the injunctive relief in the Plan, then the entire Plan fails. See, e.g., In re Purdue Pharma, L.P. Case No. 21-cv-7532 (S.D.N.Y. Dec. 16, 2021). Accordingly, such determination is a “gatekeeping” issue to confirmation of the Plan. Ordering a bifurcated trial would allow the Court to determine this issue first.

1 hour ago, skeptic said:

basiclly comes back down to the lack of "balance", like on the Lady's scale

Bankruptcy court is supposed to find that balance.  I would argue, if this was a National BSA bankruptcy only, and the settlement stayed within those bounds, we would see that scale more clearly.

1) BSA must be allowed to exit bankruptcy with a 5 year business plan that is achievable.

2) Claimants must approve the plan.  

I expect it would be much easier for all sides to find that balance.  Now, by including LCs and COs and then their insurance coverage ... that scale becomes a 9-dimensional array and likely requires a degree in high energy physics to figure out.  

If there wasn't a major impact on camps, this would be much easier to take at the unit level.  However, part of me believes if councils really wanted to save their camps they could.  Most seem happy with the direction we are headed (online MB classes and Cub Scout day camps)

19 minutes ago, ThenNow said:

Not unlike LCs and COs, no? I mean as to the declaring Chapter 11 part, not the being “Slackers” part, for the record.

21 minutes ago, Eagle1993 said:

Exactly. 

Another topic going around the lawyer/legal professor Twitter universe is how BSA's LC contributions are structured.  Specifically, a Georgetown Legal Professor is questioning how LC funds are being comingled.  He is saying this is actually a case that isn't messy and they (BSA) should easily be able to divert funds from a LC to their specific claimants.  

The professor is also questioning the insurance settlements.  The insurance, as written, has a per incident cap (many times $1M) but no aggregate cap.  However, now through their settlement they have an aggregate cap which will require claimants to take much less than the incident camp.  He states that the insurers have enough money to pay out the per incident cap.  He is questioning how claimants who approve the plan could bind the claimants who reject the plan with respect to insurance coverage.

I lot of questions remain...

14 minutes ago, ThenNow said:

Q: Since Purdue had a passel of Attorneys General banging for the deal to be overturned, along with some 2600+/- claimants, what if the deal had been a unanimous vote? Is that the only vaccine, er immunization, against such a challenge being successful?

I'm not sure that it would matter, but someone who read the 142 pages of the overturn ruling could comment better.  Let's assume 100%.  The issue is the Slackers who didn't declare bankruptcy.  So, why should someone in a year or two be prohibited from suing them if the individual was not part of the bankruptcy case.  If the Slackers want to personally benefit from protections granted in bankruptcy, then they should declare bankruptcy.

18 minutes ago, ThenNow said:

I will speak totally out of turn and lay odds that I’m right in this speculation.

I don't disagree most claimants will look at $ and speed.  YPT is probably down the list.  The reason I think BSA should have it higher has more to do with their recovery post-bankruptcy.  They need everyone on board saying the organization is safe as they exit.  

This was a list in terms of BSA priorities, not a claimant view.

The Michigan AG now has 5 open cases into BSA claims, charges may be coming soon in 1.

Nessel: Five investigations looking into Boy Scouts of America claims (detroitnews.com)

Quote

 

Michigan Attorney General Dana Nessel's office has five investigations looking into claims against the Boy Scouts of America and could be issuing charges in one of the cases soon. 

Nessel told reporters Monday that her office is sorting through about 5,000 claims, most linked to a massive federal civil sexual abuse lawsuit against the organization. 

 

Just now, MYCVAStory said:

So, that's one vote FOR the plan.  Here's another take, it's critical for this plan to be defeated or rejected NOW to allow the BSA to consider bankruptcy a failure and determine how best to stop the flow of money on this endeavor; money that is NOT going to survivors.   You can't "build" a plan in a way that does not conform to existing laws when your intent is to do the opposite.

To be clear ... I should have said ... "It is critical for a BSA plan to be approved..."  I personally don't believe this plan is going to survive appeals.  I agree with you that this plan should be rejected.  BSA's current focus seems to be (in this order):

1. Protect high adventure bases
2. Minimize local council payments
3. Speed to confirmation
4. Provide protection for charter organizations
5. Maximizing claimant % approval
6. Risk of overturn in appeals process
7. Youth protection changes

I think their priorities should be:

1. Risk of overturn in appeals process (no reason to have a plan approved that is rejected later)
2. Youth protection changes
3. Protection of local council camps (a bit different than #2 above)
4. Maximizing claimant % approval (I understand claimants will place this higher on the list)
5. Protect high adventure bases
6. Speed to confirmation
7. Provide protection for charter organizations (I just don't see how they protect COs in bankruptcy without risking appeal court losses)

Purdue Pharma update

Note that an appellate judge rejected the bankruptcy plan.  Purdue has mentioned it will appeal.  There is a twitter thread discussing how long it would take to undo the ruling.  Estimates are in the 9 month range.

So ... the Purdue possible time (Bankruptcy approved in Sept 2021, overturned in Dec 2021.  Best case for Purdue, the overturn ruling could come in September 2022 (1 year after the initial bankruptcy plan was approved)!

So ... think of this ... if BSA's plan is approved in February and then overturned by an appellate judge, it may be Feb 2023 to get that reversed.  The entire time, BSA would then remain in bankruptcy.

It is critical for BSA's plan to be approved; however, even more critical, is that it is built in a way to survive appeals.  

BSA has filed an updated version of the 5th amended plan this past Saturday.  At first glance, it is primarily about the Century deal.  However, it changes definition of abuse and a few other topics (including the Charter Orgs).  I haven't read through it fully yet.

Note that it sounds like the various groups already know where the vote is today (8 days until the deadline).  Media likely have some idea of where it is headed.

Finally, there are questions being raised as to how a single claimant class can have a vote right now when the plan is changing.  Some would have voted before and others after this change.  It sounds like this may be a major issue and now require a revote.  The DOJ raised this during the last hearing.  

There is a hearing tomorrow, about delaying the scheduled confirmation.  BSA will fight the delay.

Updated plan below:

3212ae53-bdaa-4a0f-b063-fe9611a43eb2_7833.pdf (omniagentsolutions.com)

8b02f151-4d5c-4d5b-8c09-fae757c90eee_7834.pdf (omniagentsolutions.com)

Microsoft Word - BSA - Modified Fifth Amended Plan of Reorganization (For Filing 9.29.21) (omniagentsolutions.com)

1 hour ago, Eagle94-A1 said:

I do have a few questions regarding a BSA only Chapter 11, in order of importance.

1. Since part of the charter fee every CO paid to national to have a unit over the years was for insurance, how will COs go about submitting claims if they are sued in a post BSA only Chapter 11? I know many UMC orgs submitted holding claims, but what about the others?  Will this come out of the Future Claimants Fund? Will Insurance companies have to pay out additional funds? Or will the charter orgs be out of luck and completely thrown under the bus by  BSA?

2. Since part of the charter fee local council's paid to national to have a council  charter was for insurance, How will councils go about submitting claims if they are sued in a post BSA only Chapter 11? If Council did not submit holding claims like the UMC did, are they out of luck?

I think those two questions are part of why this is an absolute mess. COs have been told since before I became a Cub they were  protected. Now it seems as if National is throwing them under the bus. Ditto with councils.

I expect both would be decided by state courts.   First, the CO would likely ask for the case to be dismissed saying they were not liable as they followed BSA policies.  If that didn’t work, then I expect the CO would then sue the BSA insurance company if they were not helping/providing coverage.  I’ve seen many examples where churches/etc sued insurance companies for not covering them in CSA.  
 

These are just a couple of guesses but I agree the issue is complex.  

1 hour ago, 1980Scouter said:

I respect your dedication to BSA but you have to realize that for a plan to be approved every entity has to be all in. This includes money and future youth protection.  

We are not there now and it will take all entities increasing their contribution and youth protection changes to satisfy the TCC and others. 

This could occur and BSA could go on their merry way. But this is a very complicated case with so many objections by many. 

I agree that a BSA only may be the way to go. Get maximum from BSA and insurance including some HA bases. Then go after LC on a council by council basis. This would likely settle national BSA much faster.

You are correct in some LC do not have much more to contribute, but most do have a lot more they could contribute. 

I think @vol_scoutermay be correct ... one cannot dismiss the chance that net/net, the current plan may end up giving the average claimant the highest settlement.  I also think @vol_scouter is correct in that it will be tough to get a much larger settlement from LCs across the board.  Perhaps some LCs can provide an increase, but if the need is 2x or 3x ... at that point, LCs will probably just rather take the risk in state courts.  If there is an LC by LC discharge option, and that money goes to the specific council claimants, there is a chance some stay within the National bankruptcy.

38 minutes ago, elitts said:

And once that's done, they can file chapter 11 without having to lose more than any cash on hand.

No chance this happens.

37 minutes ago, vol_scouter said:

It is very doubtful that the assets of the independent local councils would ever go to national.  Our council would not agree to that and our state's attorney general will fight the transfer of any council's assets within our state.  We could pivot to a youth service organization and continue a youth service mission.

The way in which you wrote the above sounds like the court is fighting the BSA which is not the case.  The court should be committed to preserving the BSA while adjudicating the bankruptcy and the judge has said that in her comments.

The state court lawsuits will drag on for many more years and many claimants will see nothing as most are statute of limitation barred.

There is not $10 B in assets in the whole of the BSA Scouting.  

I agree, but there are state councils who filed objections to the plan referencing the steps I listed.  I don't see this happening and BSA can completely avoid the question by staying in Chapter 11.  If they enter Chapter 7, this will become a question that will have to be answered.

The court will need to follow applicable law.  They call balls/strikes.  They must ensure BSA has a business plan that can succeed WHILE getting agreement from creditors.  I'm not sure what I wrote that stated the court is fighting the BSA.  Now ... to be fair .. the DOJ is absolutely fighting this plan, but they are not the court.

Agree about the $10B but there are those claiming that (I don't know what that is based on).  Per BSA's numbers, assets are in the $5B range if they had to be liquidated.

Again, this will not happen, but there are those who are pushing this path.

1 hour ago, DayNoomp72 said:

What about the pension fund? Doesn’t it get preference or whatever the term is? 

One strategy, which the court hasn't really ruled on, is the following path.

1) Keep fighting National BSA until they simply cannot afford CH11 and they then volunteer to go CH7.

2) Court appoints a group of trustees to run BSA.  Their job, just like all Ch7, is to maximize value for all claimants.

3) That group of trustees then pulls 100% of charters from all LCs.

4) Per LC/National charter agreements, once a charter ends, all LC assets are turned over to National.

5) Bankruptcy court liquidates the entire organization, and has 10B or so in assets.

First ... I doubt the whole LC thing could/would happen, so I'll ignore that.

Second ... with a National only CH7 case, yes, the pension fund would be in line.  The national pension board will ask for $XB.  However, they are an unsecured creditor ... so, they will be placed in other groups of claimants.  They are not necessarily fully funded before claimants.  That is why those with pensions typically see pension cuts post CH7.

I HIGHLY doubt National goes CH 7.  Even if the doomsday scenario above doesn't happen (which I doubt it could), going CH 7 means you lose total control.  Everything is simply sold, including all trademarks.  

2 hours ago, johnsch322 said:

If this became a BSA National only Chapter 7 then all claimants will still get their share from BSA National.  It would be less but not nothing.  On the other hand, many local councils will find themselves in bankruptcy themselves and as more states allow claims to filed more LC's over time will face bankruptcy.

I don't see this going CH7.  I could see this going BSA National CH11.

2 hours ago, vol_scouter said:

The fallacy in your view is that the local councils will accept the TCC proposal.  As they have inferred a doubling or tripling of the contributions will not be accepted in my opinion as a local council executive board for over 25 years.  The TCC is not being realistic or reasonable.  Obviously none of us have crystal balls but if this fails, the statute of limitations barred claimants risk getting nothing.  

The issue is the elimination of all liability will require payment of near bankruptcy levels for each LC.  If they are not willing to do that, I question if any court is willing to accept the plan.  

My other question ...would a LC by LC release be an option?  Those LCs that contribute enough could get releases (and those funds would be directed to claimants from those councils).  To me, the NY LCs are likely going to go immediately to bankruptcy, so perhaps they would be more willing to settle now.

1 hour ago, DayNoomp72 said:

I’m new. Can you explain what you mean?

What about the pension fund? Doesn’t it get preference or whatever the term is? 

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