Chapter 11 announced - Part 3 - BSA's Toggle Plan

[fred8033]

1 hour ago, Eagle1993 said:

If she wants to fast track this, I really think she needs to simplify the bankruptcy.  There is no way to fast track a resolution where most councils see limited number of in SOL cases and will be willing to give up the billion+ of assets.   COs have not gotten involved and the insurance situation is complex.  Add in the DOJ objection and I see no way a fast solution can come if you include councils.  
 
Perhaps she lets the global plan go to a vote, see it rejected and accepts the Toggle Plan (but stays the Hartford settlement and decision on HA bases).  Those could be litigated after BSA exits bankruptcy.  I don’t see another path if she holds to her word that she won’t let the BSA end as we know it. 

Well written. I agree with "no way to a fast solution can come if you include councils."  That seems fully correct.  It means litigation for years, but that may be the best path forward. 

[ThenNow]

8 hours ago, Eagle1993 said:

During our council townhall, they indicated that our council will have to pay a sizable amount to the settlement. 

Open or closed state? If closed, is there looming SoL reform on the horizon?

 

8 hours ago, Eagle1993 said:

The contribution is going to be large, it will hurt, but we will still be able to survive.

Does your council have many assets? I guess I am wondering what's "large" compared to the asset base, but suppose it doesn't really matter. 

 

8 hours ago, Eagle1993 said:

They cannot say the estimated amount at this time, but will when they are allowed.

I presume this is being dictated by National? It could also be their attorney, I'm sure.

[ThenNow]

10 hours ago, Eagle1993 said:

Perhaps she lets the global plan go to a vote, see it rejected and accepts the Toggle Plan (but stays the Hartford settlement and decision on HA bases).  Those could be litigated after BSA exits bankruptcy.  I don’t see another path if she holds to her word that she won’t let the BSA end as we know it. 

The Toggle Plan is now openly referred to as a cram down option, meaning it's forced upon the survivor claimants. That hasn't been done in one of these cases, but this is an extraordinary case so who knows. If she puts the current Plan documents to solicitation, she knows the votes aren't there. To allow it then is no more than an expensive legal/academic exercise, which seems anathema to her view on fees and runs counter to the BSA's "August or die" mantra. Given her parting words yesterday, I think she's hoping against hope that the parties come to some agreement. Could happen. Doesn't seem likely. I say, bring on a competing Plan asap.

She didn't say she "won't let the BSA end as we know it." (See, below.) Her point was, in my hearing of her words, that to send out Plan Option A is a waste of time and to force the Toggle Plan means BSA may get out of bankruptcy, but as currently configured on the ground it will systematically implode under the weight of litigation. To paraphrase, under the Toggle Plan, what a map of BSA looks like today will not be what it looks like in a few short years. I don't know the number of LCs in the open states, but it sounds like a hefty number in key states, some with national prominence.

Personally, and this goes way back to early conversations I had here, I don't think states are done opening up. Not by a long shot. Post Toggle, the BSA LC and Unit map would become less populated with push pins year after year. To reinforce, my primary abuse was in a closed state. The number of claims against my LC is well over 100. 3.5% of those claims are noted by the BSA as not time-barred. Those cases alone will likely sink that ship, if they are viable and have any degree of significant abuse. 

To me, Judge Silverstein is looking at the two paths BSA has presented and is saying, "I don't like either of these options. There must be a better way." 

12 hours ago, Eagle1993 said:

"To solicit a plan that has no abuse survivor support is not an attractive option. But neither is engaging in protracted litigation that has the potential to end the Boy Scouts as it currently exists."

 

Edited May 20, 2021 by ThenNow

[Eagle1993]

1 hour ago, ThenNow said:

Open or closed state? If closed, is there looming SoL reform on the horizon?

 

Does your council have many assets? I guess I am wondering what's "large" compared to the asset base, but suppose it doesn't really matter. 

 

I presume this is being dictated by National? It could also be their attorney, I'm sure.

We are a bit of a mixed state.   No look back window.  Some are pushing, but the leaders who previously support d reforms are not answering questions.  The Catholic Church is fighting hard against changes as are private schools. 
 

Council has two camps, one worth $2M and one worth $1.5M along with a scout shop in the $1M range.  I expect a camp will be sold even though listed as restricted. 
 

NDAs.  They said the leadership signed NDAs which means they can only share what is public info.  They did say the $450M is not equally spread across all councils and councils in better financial health (such as ours) are expected to pay more (there are other factors as well).

[Eagle1993]

42 minutes ago, ThenNow said:

To me, Judge Silverstein is looking at the two paths BSA has presented and is saying, "I don't like either of these options. There must be a better way." 

I wasn’t on the call, so it’s tough for me to know.  He quotes keep bringing up her desire to save the BSA.  (I don’t think any judge would want on their record the elimination of one of the largest youth organizations in the USA.) 

She also wants victims to be compensated fairly.  
 

Right now, no plan does both.  
 

I would be fine seeing the TCC plan ... perhaps that is her decision.  I know she is hoping for a negotiation, I just don’t see that happening until she makes some rulings.  

[ThenNow]

FYI. Reprinted by permission.

Peg Brickley 5.19 Hearing .pdf

[T2Eagle]

Something I still don't understand is how a TCC plan would handle the LCs.  What incentive would it provide that would lead them to contribute substantially more than is now being proposed?

[Eagle1993]

23 minutes ago, T2Eagle said:

Something I still don't understand is how a TCC plan would handle the LCs.  What incentive would it provide that would lead them to contribute substantially more than is now being proposed?

My understanding is the TCC plan would be a council by council settlement.  So, if you are in council Z ... TCC would say pay $YM and the sex abuse liabilities prior to Feb 2020 goes away.  If the council doesn't pay, then there would be no protection and lawsuits can begin.  

I think the benefit is that it really allows each council to individually decide.  Risk lawsuits, future lawsuits, future disruptions and future bankruptcy or pay a high fee right now.  I think that makes a lot more sense and may be easier to discuss with volunteers.  The downside is that the payout is likely to be much higher than what they are contributing to the $450M settlement.

What is being proposed now likely won't pass.  Sure, if it could pass it will likely be better than the TCC proposal (in terms of council payouts).

[ThenNow]

55 minutes ago, T2Eagle said:

Something I still don't understand is how a TCC plan would handle the LCs.  What incentive would it provide that would lead them to contribute substantially more than is now being proposed?

I don't know and can't really speculate. I do have a few thoughts as I look at it, both as a claimant and a former practicing attorney. If I were most of the LCs, after reviewing the data, I'd be pleading not to go Toggle B and asking for some other way, given the fact that the BSA Plan A won't be approved. Here are my thoughts:

1) By my quick scan, there are only 16 LCs with zero active/not time-barred claims against them. That's just looking at the ledger portion showing individual LC claims and not those that follow showing joint claims. between 2 or more LCs.) They seem to be in a good spot if their states have low risk of opening up and they feel confident there aren't guys yet to come forward. Personally, I wouldn't be at all confident, but business and life are a constant game of "big risk/little risk" and "now vs then" analyses. (Start at pp. 323 https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/213bd53f-b44f-45c9-97fc-246bcb7ca06b_4108.pdf)

2) A single case of CSA against many LCs could sink or nearly sink the ship, asset base depending. $18+/-M is the high water mark for judgments, as far as I know.

3) Again, super quick scan, but I see a fair number of LCs with over $10M and $20M in net assets and some with a couple hundred thousand. A few that jumped off the page on the high end are Atlanta Area with $85M, Crossroads at $53M and Silicon Valley at $45m. I didn't look closely for any with more as I quickly scrolled. (Start at pp. 265.) They can withstand some hits, but how many? I didn't cross reference cases against net assets, but I'm sure the TCC has.

4) All of this data provides a litigation map. My LC has a very solid asset base, but has 5 SoL "live" claims. 5 substantial awards and that's that. If I were them, I'd opt in and nestle in under that channeling injunction if at all possible. I also believe there are many more men that didn't come forward in my home state, some claims may have facts that tolled the SoL and it's not unthinkable that the legislature will reform the law.

My nickel, for what it's worth.

Edited May 20, 2021 by ThenNow

[johnsch322]

29 minutes ago, ThenNow said:

A single case of CSA against many LCs could sink or nearly sink the ship, asset base depending. $18+/-M is the high water mark for judgments, as far as I know.

So I looked up my LC it has over 17M in net assets as of now I am the only claimant. I am in California as is the LC.  I would think they would have to pony up a big chunk now or a larger chunk later. thoughts?

[ThenNow]

35 minutes ago, johnsch322 said:

So I looked up my LC it has over 17M in net assets as of now I am the only claimant. I am in California as is the LC.  I would think they would have to pony up a big chunk now or a larger chunk later. thoughts?

Check your inbox.

[RobertCalifornia]

39 minutes ago, johnsch322 said:

So I looked up my LC it has over 17M in net assets as of now I am the only claimant. I am in California as is the LC.  I would think they would have to pony up a big chunk now or a larger chunk later. thoughts?

I would say that you are in a good position....under the circumstances.

[RobertCalifornia]

I would like to see the TCC plan and those local council analysis sheets. 

Some more musings:

A global settlement is the only way that BSA will make it. With any other plan, the only long term winners will be the insurance companies and attorneys. 

Local councils want and need for this problem to go away. It affects moral, fundraising, and recruitment. A smart young employee would be looking for other careers...why suffer?

Local councils will go higher. They don’t have a choice. And, they are prepared to do so. They need a global settlement.

Some councils are already on the verge of failing/merging now. They have cut staff and are redistricting. They can spin as becoming leaner, but that is bs.

A lot of Scout shops are not owned by the council. The national office pays rent and the salaries for the staff. The council receives a percentage for local and online sales.

Insurance companies are the big problem. The Hartford deal is laughable. The fact that Century/Chubb is not cooperating is predictable. 

SOL’s across states are a mess. Depending on the state, you are “Safe On Litigation” or “S—t Out of Luck”. 

For all claims to receive some legitimate compensation, the insurance funds have to reach into the 10’s of billions. 

Edited May 20, 2021 by RobertCalifornia
My spelin

[MYCVAStory]

1 hour ago, johnsch322 said:

So I looked up my LC it has over 17M in net assets as of now I am the only claimant. I am in California as is the LC.  I would think they would have to pony up a big chunk now or a larger chunk later. thoughts?

Please remember that the "Local Council" data field was one of the most frequently left blank on the proof of claim form.  Those not in scouting for long or the abuse happened long ago have found it difficult to recall what Council they were in at the time.  As well, the proof of claim form was intended to be a "placeholder" if you will with the expectation being that there would be opportunity and demand for more validating information prior to any award determination.  The TCC has said repeatedly that it advocates for a robust validation plan and on that single item it is in full agreement with the insurers.   Every Council, especially those in areas where there was higher than average transient populations, should expect their number of claims to increase.  Should attorneys have done more digging to determine the Council?  Perhaps but for many that don't understand scouting and the mergers and eliminations of Councils it wasn't easy.  Again, the inclusion of the local council was not required at time of filing because of the expectation that there would be time for amendment and additional data requested.  So, 39,177 claims had unknown/missing local council data.  Expect EVERY council's number of claims to increase.  Data is found at the TCCBSA.COM website.

[ThenNow]

43 minutes ago, RobertCalifornia said:

Local councils will go higher. They don’t have a choice. And, they are prepared to do so. They need a global settlement.

I think so too. Ignorance may be blinding me, though. In part, hasn't the BSA created a huge dilemma for the LCs and COs by forwarding a Plan that has no support, risking the potential slide into their Death Trap B plan? If implemented, that launches them into the deep ocean, no? I'm rather surprised there isn't loud wailing and objecting from LCs, especially if they are willing to contribute more to get beyond this. If the TCC and Coalition aren't allowed to present their global resolution Plan of Reorganization, the LCs and COs are in a world of hurt. (See point three, below.)

43 minutes ago, RobertCalifornia said:

Insurance companies are the big problem. The Hartford deal is laughable. The fact that Century/Chubb is not cooperating is predictable. 

Yes, they are "a" problem. Agreed as to sentences 2 and 3. 

43 minutes ago, RobertCalifornia said:

SOL’s across states are a mess. Depending on the state, you are “Safe On Litigation” or “S—t Out of Luck”. 

As MYCVAStory reiterated and I said earlier, 39,000+ claims have yet to land in a LC column. They are hovering and will land, upping the numbers. One thing I am watching for gee whiz is how many of the 16 "0's"  (for claims not facially time-barred) are eliminated from the claims data chart. In my assessment, if an LC has even one viable, solid CSA case, it isn't "safe." I said this earlier, but all of these chickens haven't come home to roost and with an $18+/-M high water mark (so far). It simply doesn't take many successful abuse cases to change the entire complexion of the Scouting map or financial health of an LC.

If I was an executive with an LC, I would be pounding on the BSA's front door to let me in with cash in hand and beg them not to launch me into the ocean. Again, 16 zeros in the non time-barred claim column will be shrinking. That is nearly statistically certain. My wife is a risk officer for a major health system. As I observe what she does, assessing and eliminating yet to be litigated claims is almost as big a part as managing live claims or liquidated awards. Big risk/little risk. Known risk/unknown risk. Which will it be?

Edited May 20, 2021 by ThenNow
Oops.