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12 minutes ago, ThenNow said:

Asking for your analysis, since it makes no sense to me whatsoever and seems to flaunt his ethical responsibility.

No, in other words think of the pot.

TOTAL assets for BSA National is $1.4 billion.

Local Councils = $3 billion (yes, there some quibble here, but bear with me).

Kosnoff looks at the ENTIRE pot as $4.4 billion in assets. Not $1.4 billion. Thus, he'll happily let Pension Benefit Guaranty Corporation have the $1.2-$1.4 billion if he can get access to that $3 billion.

If you are Kosnoff and thinking the prize is $3 billion, a $300 million offer from LCs + $300 million more from BSA is chump change.

From an ethics standpoint, he's fine. He's attempting to maximize his client's interest because $3 billion > $600 million.

And it has the added "benefit" in his mind of fulfilling his own personal agenda: liquidation of BSA

Edited by CynicalScouter
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What is legally right is not always morally right.

I would encourage everyone to not ask @ThenNow to rehash particular circumstances. They can be found by patiently browsing his posts. From what I read, they were far from legal. His claim would have b

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12 minutes ago, CynicalScouter said:

Kosnoff looks at the ENTIRE pot as $4.4 billion in assets. Not $1.4 billion. Thus, he'll happily let Pension Benefit Guaranty Corporation have the $1.2-$1.4 billion if he can get access to that $3 billion.

I know, but how is HIS pot the whole pot and what happens to his ethical duty? He's not the only player attorney with a goodly number of claims, lots of firms and guys I know have cases teed up in BIG $$ open states (as in already filed), and not all of the Coalition crew's claims are in open states, if even all valid. Effectively, you're saying he'll screw some (a lot) of his clients out of something to get the BIG YUGE something for others (and himself) in open state. That's the crux of my inquiry. "Yea, verily, or that guy (me) is so stupid?" 

 

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2 minutes ago, ThenNow said:

Effectively, you're saying he'll screw some (a lot) of his clients out of something to get the BIG YUGE something for others (and himself) in open state. That's the crux of my inquiry. "Yea, verily, or that guy (me) is so stupid?" 

Like I said, I shouldn't be trying to crawl into his head, but that was my best stab at how he can thread that ethical needle.

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2 minutes ago, CynicalScouter said:

Like I said, I shouldn't be trying to crawl into his head, but that was my best stab at how he can thread that ethical needle.

NB: I am not saying it is what he's doing or thinking. I'm just trying to cipher out the angle.

If he was my attorney, given my closed state status, I'd be screaming for him to "show me your work," as in a math exam. And, if he came back with the classic, "This is the right answer. I just did the calculations in my head...you'll have to trust me" or my fear was confirmed, I'd be on the horn to every national bankruptcy beat reporter screaming some more.  

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53 minutes ago, CynicalScouter said:

BSA's Reorganization Plan involves BSA AND the LCs AND the insurance companies paying into the Settlement Fund.

That Reorg plan literally spells out, in black and white, that LCs and Insurance Companies will be paying along with BSA.

Only, that's the problem.

1) LC's are being asked for "voluntary" contributions equaling $300 million by BSA and they ain't volunteering much if at all. The TCC is insisting that LCs be MANDATED to give SPECIFIC amounts that far exceed $300 million. And by the way, this BSA reorg plan concludes with both BSA National AND THE LOCAL COUNCILS having all abuse claims prior to 2020 ended. Meanwhile, the LCs are still palying games/being coy about how much they'll pay, if at all. And the Ad Hoc Committee does NOT legally speaking speak for all 200+ LCs. From a technical standpoint, they only speak or 8 of them.

2) Insurance Companies are not keen to just hand over cash by the bushel. First, they don't think they have to pay a DIME to cover the sexual abuse claims against BSA because (they say) BSA lied to get the insurance policies. But even if the insurance companies DO have to pay, they insist many/most of the 80,000 claims are B.S.

So no, cutting a deal with BSA alone is not going to mean anything if MOST of BSA's deal consists of "Go get money out of the LCs and Insurance Cos". That's not going to fly at all.

 

I follow - thanks.

But, as this is a bankruptcy case for the BSA, isn't the real question on the table what to do with BSA national?  

The BSA will run out of money - so either it goes into Chapter 11 or Chapter 7.  In order to negotiate a settlement, the BSA  has made a proposal that is larger than just BSA national - it includes the LCs as well.  This settlement, if agreed, is the "neatest" way to close all the issue on the table.

However, if the parties cannot agree to a settlement - we are still left with BSA national going bankrupt.  We've all been thinking that if not settlement is reached, then a Chapter 7 occurs.  However, given the judge's comments isn't it just as likely that she'll impose a settlement that will allow a Chapter 11 to occur.  

In short - isn't she telling all the lawyers that they need to come to an agreeable settlement.  It's not just a case where the claimants can say they want more and force Chapter 7.

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5 minutes ago, ParkMan said:

We've all been thinking that if not settlement is reached, then a Chapter 7 occurs. 

Ah ok, yeah. I've already said there are three options. Chapter 7 is just one of the options if no settlement happens.

Option 1) A failed bankruptcy. BSA emerges with no reorg plan and immediately faces at LEAST 800 already filed lawsuits, plus thousands more. Spends the next decade making individual settlements. Past a certain point BSA goes back into either Chapter 11 or Chapter 7.

Option 2) A Chapter 7 liquidation. As noted elsewhere, because BSA is a not for profit, it cannot be forced by the judge or creditors into liquidation: it has to select this for itself.

Option 3) A judge-ordered cramdown. The judge ORDERS a settlement as defined by her over the objections of the sexual abuse claimants. That has never happened before.

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41 minutes ago, ParkMan said:

the BSA  has made a proposal that is larger than just BSA national - it includes the LCs as well.  This settlement, if agreed, is the "neatest" way to close all the issue on the table.

Therein lies the rub. They haven't "included" the LCs other than by reference and an, "I promise to ask them if they would contribute $X...pretty please?" No solid agreement from the LCs or COs, forget all the other gaping holes. This made everyone but the BSA and apparently the LCs and OCs uber unhappy. The trebuchets were thus uncorked.

But, per many here, LCs have been repeatedly assured, "All is well. Don't worry your pretty heads. Back to the campfire, knots, j strokes, signaling and lashing. The adult table is full up." Now, the jig is up and the scramble is on.

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1 minute ago, ThenNow said:

Now, the jig is up and the scramble is on.

There was a formula circulated by the Ad Hoc Committee at least as early as last fall to all LCs. It was suppose to let LCs know that if they WANTED to VOLUNTARILY participate and get all abuse claims in their councils closed, they had to just plug in some numbers and out would come an answer.

Now, however, a lot of those councils are starting to realize (or perhaps be told, who knows) that it is "voluntary" but if they don't BSA will NOT be able to come out of bankruptcy and LCs are on next on the menu (there's already 870 suits).

As you've described it, this is the "missiles are set to fly" motif. LCs are being invited to come in and help, or else.

No one has to my knowledge ORDERED LCs to pay into anything, but if they don't it all comes crumbling down. TCC's latest agreement means I'd expect to see another 1 to 2 THOUSAND suits filed based on just NY, NJ, and NC alone.

Even if your council is in a state with no lookback window, the pressure will be on to offer SOMETHING in order to keep BSA alive and to ensure no future lookback windows occur.

The question is how much. LCs that are pleading poverty/we have only restricted assets better have a good, hard look at things. I know some very tiny Councils for which that is likely true. But some of these other councils are looking around at camps, office buildings, and the like and asking "How much and how soon" can we sell this.

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29 minutes ago, CynicalScouter said:

There was a formula circulated by the Ad Hoc Committee at least as early as last fall to all LCs. It was suppose to let LCs know that if they WANTED to VOLUNTARILY participate and get all abuse claims in their councils closed, they had to just plug in some numbers and out would come an answer.

Was it a serious calculator with legit and accurate input fields, multipliers and all, or "you pick em" averages for claims, etc.? Of course, no one had any idea of the number of claims then. I'd be interested to see it run on some of the LCs now.

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8 hours ago, ThenNow said:

I believe the estimate is that a total of $150M in fees will be spent through July. $10M per month'ish. (Just saved $100M. Now, they have plenty of money and time to burn it. Jk.)

Ahhh ...   I just re-read.  You are right.  $150 by August.

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5 minutes ago, fred8033 said:

Ahhh ...   I just re-read.  You are right.  $150 by August.

As people would say today, "I didn't spend $250M, just $150M! I saved $100M Yay me!" I told my kids, "If it ain't in the bank or an investment, you didn't save squat. Not spending does not = saving."

Ha.

 

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3 minutes ago, fred8033 said:

A previous post from quoted the judge saying $250M would be spent by law firms by August.   Quote from Eagle1993 3/17/2021 at 12:16pm.

No, BSA's lawyer said $100 million so far, $150 million total expected by August (so $50 million more expected over next 5 months). The Judge then quoted those numbers in her comment. Whoever posted the $250 million figure must have mistakenly added those two figures together, double-counting what has been spent so far.

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Can someone please explain to me what “Estimation of Claims” is in layman’s terms?

Also, is anything happening prior to the status conference in mid-April?  And is that just what it sounds like; a check-in on progress of BSA supplying rosters?

From what I can tell by reading the last four pages, there’s been no ruling on whether LCs are separate, is that right?  Did she indicate whether LCs must come to the table?  We all know they’re going to have to, but as of now they’re still not being required to?

Thanks.  

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5 minutes ago, ThenNow said:

Was it a serious calculator with legit and accurate input fields, multipliers and all, or "you pick em" averages for claims, etc.?

I have no idea because the only people with access were Council Key-3. But as was described to me by our Key-3 in a Council Zoom town hall, and confirmed in conversations I had with a friend in the "next door" council where it was called an "Algorithm"

Number of claims * Average claim cost *  How likely are those claims going to showing up in a courtroom (Statute of Limitations, likelihood that all claims will convert to lawsuits) = Total amount due.

Then there was an adjustment to consider the fourth variable: what assets does the Council have to offer?

The big confusion was the question of average claim cost AND probability of claim converting to lawsuit. Obviously in SOME states that percentage is going to be higher than other states. And claim cost? Who knows. The average payment in the Catholic abuse scandals was around $200,000. Is that too high? Too low?

This is ALL we were told at the unit level. EVERYTHING else, the Key-3 were told to shut their yaps about given that this was active pending litigation and that the formula was at the time still being worked on.

So who knows? I do know this. And it is my Magical Math time again.

The AVERAGE council has about 170 claims.

The AVERAGE Catholic abuse claim was around $200,000

170*200,000 = $34,000,000

Now if you are a council, you have to figure out the probability those 170 claims turn into cases.

If there's LITTLE chance (statute of limitations closes most cases, lack of desire by claimant to pursue case in civil court reduces the rest) then let's say 5%

170*200,000*5% = $1,700,000

But if those 170 claim are in a state where the statute of limitations is not an issue? Let's say 25% chance of converting a claim into a lawsuit.

170*200,000*25% = $8,500,000

But again, this is just random wild numbers here.

Then you have to adjust for assets. If you are Aloha Council (171 claims) with reported UNRESTRICTED assets of $6 million in 2018 (Part X, Line 27)  $1.7 million is tough but doable. $8.5 million, not so much.

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7 minutes ago, swilliams said:

Can someone please explain to me what “Estimation of Claims” is in layman’s terms?

A) Take ALL 80,000 claims currently pending.

B) How much is the AVERAGE cost for each claim going to be? That is going to require the court to go through either a sampling or all claims. Probably just a sampling (e.g. 800 out of 80,000). This will be almost like a mini-trial. Victims may be required to testify. Experts brought in to discuss pain, suffering, loss of income, etc.

Multiply A*B = How much needs to go into the Settlement Fund when all this is over.

Then the next part: who pays for what parts of that number. BSA? Local Council? COs? Insurance companies? THAT comes later down the road. But at least at the point you've got a number to work with.

Edited by CynicalScouter
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