CynicalScouter

Sure, it could have been that there were enough people who had problems that no one could agree. Just based on the court filings the issue was the Coalition payment, but there may have been a slew of other problems behind the scenes. I would note that the attorney for the Ad Hoc Committees for Catholic Dioceses and Methodist Churches (same lawyer, different committees) was pretty irritated when he noted the Ad Hoc Local Committee for LCs and BSA has said that the RSA was not the real, final plan and that work would be done with the COs. His point was (paraphrasing) what are we doing here then if the REAL plan is going to include COs and there's no mention of them in here yet? He mentioned his clients don't have tons of money to engage in "bare knuckle" litigation and reminded BSA that without COs that scouting doesn't exist. Once again, BSA's lawyers assured the COs lawyer that they understand and (it was either the judge ot BSA's lawyer, I forget) that said there was a mediation with the COs coming up.

So, with only the Rule 2019 motion left for tomorrow, let's see what that means. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/5047339b-0dff-47e3-8939-4bd5f4cf3406_5802.pdf In short, this gets at a problem that has been rolling around for over a year: what exactly is Abused in Scouting, its legal status, and who speaks for those abuse victims? And what is the relationship between Abused in Scouting and the Coalition? And oh yeah, his constant insulting of the judge? The Insurance Companies made sure the judge is aware of it. And the insurance companies even found out Kosnoff was held in contempt for court as part of his divorce last year. But this is all a side show to the real question: when it comes time to sign documents on behalf of clients, who exactly is the attorney/attorneys of record here? What is AIS? What is the Coalition? And can any of them really, truly sign anything on behalf of anyone?

Right, as recently as July 26 you had a brief filed by the TCC/FCR/Coalition in support of the RSA https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/0d7f3457-6371-48c1-98d4-07c0cd63a58b_5760.pdf And on July 22 they filed in Joinder in support of BSA's brief https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/cb5ac036-4493-4999-bba6-faf70eed01ee_5680.pdf But the opposition to the Coalition being prepaid ahead of everyone else was universal and included the US Trustee. If I had to guess, the parties to the RSA were re-negotiating the Coalition payment. Those negotiations were still going on when the deadline crept up. Unable to agree on the issue prior to the deadline expiring about how much the Coalition should be pre-paid and when, the deal fell apart.

I agree that SOME kind of RSA is possible to be brought back and I mentioned as such earlier. Perhaps one where the Coalition isn't pre-paid/paid ahead of abuse victims. The broader point, however, is that even if it is brought back, there is still enormous opposition, not just from the insurance companies but others including some victims attorneys about some key aspects, especially the voting rights of victims in closed states and that the COs are absolutely livid at the RSA and the plan it contemplates. Sure, it can come back, but BSA has also been squawking about how it is soon out of cash. What of that as well. Etc.

Kosnoff is on a tear tonight. Liquidation remains his only answer

Amended notice of July 29 hearing posted. RSA is officially not on for hearing. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/6bc5e503-8c0f-4a0c-9750-e0d11b194949_5796.pdf

https://lawliberty.org/an-elegy-for-the-boy-scouts/

True, but that Gray plan was part of a larger package. Someone, somewhere, got upset at some part(s) of the RSA. If they pull whatever offending part of the RSA out, will BSA and others still be OK with the Gray plan? I know during the prior hearing several lawyers for victims in open states said that victims in closed states should get no vote at all, implicitly rejecting the Gray system. And the numerous objections filed by victims attorneys indicate they are upset at the RSA including the idea that victims in closed states should get a vote. And from an attorney's responsibility perspective, I get it. Each BSA dollar that goes to a victim in a closed state is one less dollar for my client who is in an open state, therefore, BSA shouldn't allow those victims in closed states to get one thin dime. An attorney's supposed to be looking out for the best interests of his/her client and from a pure legal ethics perspective, I'm not surprised that attorneys in an open state like California (the one lawyer I recall in particular was California) are pushing to keep victims from closed states out of this through something like the Gray system.

Interestingly, with the RSA now blown up, the Gray 1-3/Open/Closed is now off the table (for now). That means BSA defaults back to its old position/last filed with the court: 1) Open states = 100% 2) All other states = 1%

With the judge having announced in open court today that the RSA hearing set for July 29 is cancelled, the question now is whether they will proceed with the Rule 2019 motion(s) or simply set everything back.

Sorta. There was an agreement reached in February and March that lifted the stay ONLY TO THE EXTENT that people could file suit. It was especially key in those instances where the statute of limitations window was about to close (such as NY, NC, and NJ). Once you file your lawsuit, the state court immediately stays the proceeding pending whatever happens at the end of the bankruptcy.

They haven't. The point is that it is not 100% certain how much liability Hartford would face. There were thousands of claims involving Hartford covered entities in states that may or may not have had SoLs facing claims that may or may not have been provable in a court of law decades later, etc. Plus, some of these Hartford policies had liability caps: the policy would max out at say $XX million for all claims in 1972 (I'm just picking numbers as an example here) an after that BSA was on the hook for the rest. Etc. One of the documents (I forget which) did list every single insurance policy going back to the 1930s

Not necessarily. It could exit bankruptcy as a "Failed bankruptcy" and simply wait to get sued out of existence. Or, as Kosnoff's wanted, the judge could appoint a person to take over BSA and that person could determine that yes, there is no alternative left but Chapter 7 AND then go after the Local Councils for everything they've got.

BSA may not have years. Remember: they kept saying over and over, out of money by July or August. Even with the RSA, the fastest they could get out of bankruptcy was October. This could be a simple one week delay to get a modified RSA put together. This could be no delay at all and they can get to a disclosure statement on August 17. Or this could mean yes years in which case at some point or another (sooner I suspect than later) the cost of the bankruptcy plus declines in membership simply kill BSA.

It depends on how are apart the sides were. First, who was it that was refusing to extend the deadline for the RSA? I don't think it was BSA and I extremely doubt (though not impossible) it was the Ad Hoc Committee of Local Councils. So that leaves FCR, Coalition, or TCC. What follows is wild speculation. Copious salt here. Fact 1) I noted that at least a dozen objections representing hundreds of abuse victims had been filed to the RSA plan. Fact 2) Kosnoff was very vocal that this was a bad deal and a deal that wasn't legally supported. Fact 3) The US Trustee and everyone else objected to this RSA. Speculation: The TCC, FCR, Coalition, or some combination, sensing the blow back and sensing that there was little to no chance this was going to be approved decided to use the deadline to simply let the RSA die. What happens next? 1) There is a disclosure statement hearing still set for August 17. We can go into that hearing without an RSA. And RSA isn't mandatory, it just makes things easier because it preresolves some issues with some parties. 2) We are back to where we were in June: no deal and nothing that would ever get to a deal that involves the LCs. BSA goes into that August hearing and tries to get itself out of bankruptcy and leaves both the COs and the LCs to fend for themselves.

That has now apparently happened. The kill switch has now happened. SOME parties to the RSA (TCC, FCR, Local Councils, Coalition, or some combo platter) have decided NOT to extend the deadline for the RSA (or at least were refusing to do so as of 3pm Eastern on July 27) therefore, the judge has decided to cancel the July 29 hearing on approval for the RSA. The deal's dead folks.

WOW. At end of hearing, Lauria notes the RSA deadline terminates tomorrow. Lauria notes that RSA parties are unwilling to extend the deadline but negotiation still ongoing. Judge is furious. The July 29 RSA hearing is now cancelled. WOW. The RSA plan is dead. The deal is off. BSA may re-schedule the hearing on the RSA or some modified version of the RSA for some later date. Just wow. All the depositions and such that was to take place about the RSA is off. It's over. I warned last month there were a ton of ways this could derail, and it did. Wow. I would expect media reports about this later this afternoon, but the plan to get BSA out of bankruptcy just blew up.

Catholic Dioceses/Methodists attorney is pretty mad and certainly indicating the COs are upset. There was a comment that BSA will have a mediation session with COs "soon". Judge is concerend 1) Mediation privilege/withholding: this issue should have been brought to judge sooner not at the last minute 2) On the other hand, on the surface looks like BSA improperly withheld information and mediation privilege did NOT include board minutes, presentations, etc. "Mediation doesn't cloak discovery" just because you put otherwise discoverable material and mediation material together. You redact the mediation material, not the ENTIRE document or the ENTIRE board meeting. She is not prepared to delay the July 29 hearing. Instead, what she is indicating is that if suddenly some of these witnesses start to testify about things that are suddenly being released, she will reject the testimony. Mosby's testimony MAY be struck entirely due to this mess. That is to be determined. Think about this: BSA has managed to screw this up so badly that Mosby's testimony may get struck.

Hearing is interesting. BSA is withholding tons of materials regarding how the Executive Board decided to reach the RSA and its business judgement in doing so BUT at the same time is refusing to allow those documents out the door (other than there was a board meeting and who was there) and telling board members like Ownby and Mosby not to answer any questions based on attorney/client privilege, mediation privilege, and a slew of other privileges. In particular, it looks like the insurance companies are arguing that BSA has surrendered and is simply letting the TCC write the RSA in a way to screw the insurance companies. In other words, is this BSA's business judgment that the RSA is a good deal, or has it simply allowed one set of creditors (TCC) to take over the bankruptcy? The insurance companies are objecting. The Catholic Dioceses/Methodists are objecting. Everyone's objecting. BSA cannot argue that the RSA is a reasonable business judgement and then refuse to say how it reached that decision and hide behind privilege.

I just am catching up, but this is a doozy. The TCC/FCR/Coalition filed a brief in support of the RSA. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/cb5ac036-4493-4999-bba6-faf70eed01ee_5680.pdf They absolutely want the court to force the insurance companies to pay and to make the bankruptcy binding on the insurance companies. And they want this issue settled NOW, not years from now, especially the argument that, if BSA and the LCs are only having to pay $850 million that insurance liability is capped at $850 million as well They also go after LDS hammer and tong and argue that BSA shouldn't have to indemnify or protect LDS because LDS made or allowed that abuse to happen and then tried to cover it up.

One more point: more and more victims are coming out against this RSA plan in filings with the court. I count at least 12 different filings representing hundreds of claims/victims (they are listed by claim number) objecting to the RSA plan.

Update: AMENDED notice filed, there is a hearing taking place TODAY (July 27) to address issues related to mediation privilege. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/c309500e-d945-4204-be88-d476f83cce8d_5788.pdf For those of you who have been saying that BSA and LCs are not bound by mediation privilege and/or NDAs, this is going to be the hearing to watch. Reading between the lines, I believe that BSA and the LCs have read the mediation and NDAs was restricting things and conversations that others are arguing are just fine. But we'll know details about what is being contested shortly.

Official notice for the July 29 hearing along with Zoom link. The judge has already indicated she expects this to take two days. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/2033f26f-54f7-4914-bb4f-ba262ed196ab_5786.pdf As a reminder on the agenda (likely in this order) The 2019 motion(s) Century’s Motion to Compel Abused In Scouting, Kosnoff Law PLLC, and the Coalition to Submit the Disclosures Required by Federal Rule of Bankruptcy Procedure 2019 (D.I. 2030, Filed 2/3/21). There's also a related motion which may be absorbed into the discussion on the above Hartford Accident and Indemnity Company, First State Insurance Company and Twin City Fire Insurance Company’s Motion to Compel Abused in Scouting and Kosnoff Law PLLC to Submit Rule 2019 Disclosures (D.I. 2028, Filed 2/3/21). This is the effort to definitively identify what the financial and legal relationships are of Kosnoff (personally), Abused in Scouting, his law firm, and the Coalition. Expect to see/hear a lot about who is financing the Coalition, how much control Kosnoff does/does not have, what the role of the Coalition is, what the role of Abused in Scouting is, and what authority AIS or the Coalition have to sign anything on behalf of anyone, etc. This was Kosnoff's response by the way from last week. In short, he's claiming Abused in Scouting doesn't really exist, sorta: https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/522c3978-8f36-4dec-a7be-46d598e169f4_5679.pdf The RSA Debtors’ Motion for Entry of an Order, Pursuant to Sections 363(b) and 105(a) of the Bankruptcy Code, (I) Authorizing the Debtors to Enter Into and Perform Under the Restructuring Support Agreement, and (II) Granting Related Relief (D.I. 5466, filed 7/1/21). The main item. At this point, this is where the knockdown drag out is going to be. So far, there are enough objections (Hartford, US Trustee, Insurance Companies in general, LDS, Catholic Dioceses, Methodists, etc.) to enough parts that I do not personally see how this ends approved by the end of this hearing on July 30. If the judge issues a ruling approving it at all, it is going to be after the hearing I would suspect. What is NOT on the agenda (but will get brought up again and again anyway) The Disclosure Statement/Voting and plan confirmation. Theoretically, July 29 is all about the RSA: the Plan to get a plan/settlement/something for victims to vote on. The hearing on the Disclosure Statement and voting is set for August 17 CONTINGENT on this RSA thing getting approved. If the RSA fails, then the August 17 hearing is either off or turns into a hearing on a revised RSA. Everything gets delayed another 30-60 days. Confirmation would be later in the fall, see below. Even if 2/3rds of the voting victims approve the settlement, the judge at the confirmation hearing can still veto this whole thing. Conversely, even if LESS than 2/3rds of the voting victims reject the settlement, the judge can confirm it anyway ("cramdown"). Expect parties to try and kick some questions/cans down the road. The BSA and TCC/FCR/Coalition want to delay and postpone a lot of these questions until then. The insurance companies, some victims lawyers, lawyers for COs, and others want these questions answered NOW prior to voting. Timetable I posted here. In short, my estimate was (if everything works PERFECTLY as BSA wants it) late October before BSA is out of bankruptcy. I believe some law firms have notified their clients their estimate was early October.

Just FYI it appears that the latest bone the insurance companies plan to pick, among others, with the RSA is the same one that the US Trustee and others have voiced: Why on earth is the Coalition getting paid out for its legal fees now, ahead of everyone else including the victims? How does it rate such special treatment and, as the US Trustee pointed out, what statute authorizes this? It is very, very much looking like the lawyers for the Coalition are getting a guaranteed payout now ahead of everyone else. The question is why and for what? The Insurance Companies seem to have a theory or two about that. The latest is that now BSA is trying to "backfill" the justification for paying out the Coalition and releasing National Executive Board meeting minutes and discussions AFTER the depositions of Mosby and others. Now the insurance companies want Mosby, Whittman and others back into a deposition room to explain how this sweatheart Coalition deal got cut https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/50faea53-574a-427b-b767-9e7ff03e8926_5776.pdf

It is also, I truly believe, true that BSA will eventually exsanguinate and bleed out all its cash, resulting in a Chapter 7 by default if this doesn't end some point soon. BSA wants out, ASAP. If later down the road the insurance companies, the COs, the US Trustee, and others are right and this gets overturned on appeal, BSA still has its bankruptcy discharge and will be out from under whatever happens at that point.