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

[johnsch322]

11 minutes ago, ThenNow said:

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.

I would think that the BSA has another more robust plan for survivors (remember the motto "be prepared"). The "Death Trap B Plan" leaves all of the LC's and CO's on the sinking ship and the BSA National on the only lifeboats. Would they wave and say good luck? How much bitterness would that generate? BSA National needs the LC's or there is no BSA.  Yes they can grant new charters but the publicity on the local and national level for the next 4 to 5 years will deter more parents from allowing their children become part of the organization.  With out new blood BSA cannot survive and I am sure that they know this.  If there is a Global Settlement then BSA can wave the flag and the spin will be look at what good we have done for our former members.

[ThenNow]

7 minutes ago, johnsch322 said:

I would think that the BSA has another more robust plan for survivors (remember the motto "be prepared").

No time like the present and there may be no time at all if it isn't now.

I haven't seen it noted, but the BSA's, as opposed to the TCC commissioned Berkeley Research Group's, assessment of net aggregate LC assets is $3.296B rounded. Of that, $1.427B is claimed to be restricted in one form or another leaving $1.896B unrestricted. I am so anxious to see BRG's comparative numbers I hardly bear it. I fear I will not get my wish, at least not for a good while. Alas. 

[johnsch322]

Here is a link to what the TCC feels that an abuse is worth for negotiating purposes. 

Boy Scouts of America: Pachulski Stang Ziehl & Jones (pszjlaw.com)

Couple that with the table 

Unique and Timely Abuse Claim Count by Local Council & Allegation Rows 1-264 (in white) list Abuse Claims against individual Local Councils. Rows 265-1,267 (in blue) list Abuse Claims against more than one Local Council

Contained in:

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/213bd53f-b44f-45c9-97fc-246bcb7ca06b_4108.pdf

And now we can see how the TCC came to value the abuse claims at 103 Billion

[DuctTape]

Assuming the $103B is what should be owed, isn't the purpose of bankruptcy due to not being able to pay all debts? Therefore isn't the whole point of the bankruptcy judge to determine what reduced amounts each creditor will recieve? 

[johnsch322]

8 minutes ago, DuctTape said:

Assuming the $103B is what should be owed, isn't the purpose of bankruptcy due to not being able to pay all debts? Therefore isn't the whole point of the bankruptcy judge to determine what reduced amounts each creditor will recieve? 

As mentioned the TCC said that the table of what a claim was worth was for negotiation purposes.  If you read into that then the 103 Billion would be the same.  I am not the one to say that it is the bankruptcy judges decision to reduce amounts (can someone else comment on this) I will say there is a large gap between 2.7-7.1 and 103 billion.  I do believe that the judge could rule on some motions to get the figure above what has now been proposed by the BSA.

[RobertCalifornia]

Just glancing through the council assets, I was a bit surprised that a lot of camps were unrestricted. It would not surprise me if BSA owned more forest land than most small states.

There are at least 10 councils that have 50 million in assets. There are probably 30 that have 10 million or more.

The big ones were Sam Houston, Circle 10, Atlanta, and the America councils. These are over 600 million. Then, there are a bunch of councils smaller than 5 million.

[Muttsy]

As cryptic as the judge's comments and questions seemed, I think she will do the following (generally), because there is no alternative for her. She knows there is no support for the BSA plan A. The toggle plan means cram down and she knows she cannot cram down a plan over the objections of 95% of the victims, either politically or legally. A cram down has never been done in a sexual abuse bankruptcy and she won't do it here. 

First, Kosnoff's/Abused in Scouting's campaign to encourage its 17,000 clients to write to the court has been impactful even if the judge redacted portions of them. Only the mediation parties were allowed to see the Proof of Claim forms; the world got the opportunity to read the letters and the excruciatingly painful personal narratives. The TCC led its opening argument with the letters and what they mean. The letters were important to counter the judge's apparent debtor bias, e.g. "restoring the BSA and its mission is paramount" and "the BSA needs to put this behind them and get back to fundraising," etc. She's said nothing about whether the BSA can be made reasonably safe for children going forward. Experts have opined that the structure of scouting is inherently risky because it places scouts in vulnerable situations that no amount of scout protection training is going to change. 25% of the claims in the bankruptcy involved abuse after the BSA implemented its sexual abuse programs in the late 1980's. see ChildUSA Report on Scouts. 

The judge is going to end BSA exclusivity, probably on Monday. The plaintiffs will get their shot. Their plan will be filed within two weeks if not sooner. After it is filed, some of the councils and insurance carriers will engage in (more) realistic negotiations because she will order the BSA to turn over to the plaintiffs decades of its settlement claims files. These files will contain the evidence of claim value because they will show what the BSA and its carriers actually paid on similar claims and cases over the years. She said she would do it on a letter request meaning no motion is necessary. That was a big deal yesterday. 

Once plaintiffs have that data,  claims estimation would superfluous. She strongly hinted that claims estimation would be wasteful, expensive, unnecessary and that she didn't feel it fell within her job description. 

She implied a few other important things. The issue of insurance neutrality means the insurance companies are allowed to object to a plan and be heard at confirmation, but they don't have the power to block the plan. That apparently is the law and was the part of the discussion yesterday about the origins of insurance neutrality as an offshoot of "standing" law. 

I believe she will signal she is not going to approve the Hartford settlement. I thought the Coalition argument that the settlement sent a terrible signal to the other carriers that they were in control of the case and need not seriously negotiate. It also broke whatever good faith may have existed between the plaintiffs and the BSA and also the mediators who brokered it. Regarding the mediators I think she recognized from the various colloquies about how the mediation sessions were being run that the mediators are an impediment to progress. That's why she told the parties to start talking directly to each other. She basically fired the mediators is my take. 

The TCC/Coalition/FCR Plan will encompass settlements that are worked out in the next 60-90 days with participating LC's, SO's and insurance carriers. Those participating entities will get third party releases and will participate in the channelling injunction. Something critical from yesterday is that she was open to retaining continuing jurisdiction for some period of time post confirmation and would approve/modify the confirmation order to include those entities who settle with the post confirmation trust. For the holdouts like Century, Chubb and the other hard cases like the Mormons, they get thrown in to the post confirmation trust and they can slug it out there for the next how many years. That realization may bring some of them to the table now or not long after plan confirmation as they see the ship sailing away. They may also be incentivized to get realistic because it will get more expensive for them to hold out. As noted here, more states are passing windows. (Last week, it was Arkansas! Arkansas! ) The dominoes are falling. MI, IL, OH, FL, TX etc won't be far behind.) 

For those holdout LC's and SO's they will be facing tens of thousands of lawsuits and not only from claimants in the BSA bankruptcy. More victims will come forward and file lawsuits against those entities. It will cost them more, probably much more to settle later on assuming they don't get wiped out in their own bankruptcies. 

The judge won't do estimation.  Everything unresolved will go in to the post-confirmation trust. Whatever funds go in to the trust at confirmation effective date, the net after set-aside reserves to fund the trust and its lawyers, will be distributed to the claimants under the Distribution Trust Protocol or whatever its called. That is where claims will be vetted for fraud, lack of evidence, etc. As the trust settles out with holdout insurance carriers, LC's and SO's more funds will be available for subsequent distributions. Or those claimants can pursue their lawsuits separately. 

The toggle plan was highly significant because it was a clear message to the LC's and SO's that the BSA intends to survive even if it means throwing them under the bus. I learned from this discussion board that the LC's and the SO's are not indispensable because BSA can adopt a different model that does not utilize the LC/SO system e.g. Girl Scouts. 

The LC's can survive under this approach but it won't be pain free. I'm unsure how much of their asset values that they would have to surrender to settle, 40-50%?, but it won't be pain free as they seem to have expected up to now.

I would hope to see all the dead wood on the National Board and the local boards cleared away and new leadership installed.

Edited May 20, 2021 by elitts
removed comment about judge

[qwazse]

31 minutes ago, RobertCalifornia said:

Just glancing through the council assets, I was a bit surprised that a lot of camps were unrestricted. It would not surprise me if BSA owned more forest land than most small states.

There are at least 10 councils that have 50 million in assets. There are probably 30 that have 10 million or more.

The big ones were Sam Houston, Circle 10, Atlanta, and the America councils. These are over 600 million. Then, there are a bunch of councils smaller than 5 million.

We'd have to dig through some old forums to find the discussions. But, there has been a shift in policy away from developing restricted assets. Chances are most of the newer camps (or camps with newer expansions) are unrestricted.

Camps with restrictions are older because councils can't sell them off.

The acquisition land in the face of declining membership has been an ongoing topic of these forums.

[RobertCalifornia]

4 minutes ago, qwazse said:

We'd have to dig through some old forums to find the discussions. But, there has been a shift in policy away from developing restricted assets. Chances are most of the newer camps (or camps with newer expansions) are unrestricted.

Camps with restrictions are older because councils can't sell them off.

The acquisition land in the face of declining membership has been an ongoing topic of these forums.

Makes sense....who wants to own a restricted old camp on the beach if you can sell it for a windfall and build a modern camp to meet your needs. 

[RobertCalifornia]

Are there any minutes or a recorded zoom from the May 19 meeting? 

[RememberSchiff]

20 hours ago, MYCVAStory said:

FYI, this (hearing) was already scheduled to continue to next Monday to address everything on the agenda.

 

Monday May 24, is also the first day of the virtual National Annual Meeting (NAM). 

[ThenNow]

1 hour ago, RobertCalifornia said:

 

Are there any minutes or a recorded zoom from the May 19 meeting? 

 

I believe transcripts are delayed for a while as effectively proprietary to the court/stenographer. It’s recorded, but I think only for the transcription and court’s use. I’m guessing or vaguely recalling. Nothing is available right now as far as I know (which is approximately the distance between my keyboard and my nose on most days).

Edited May 20, 2021 by ThenNow

[ThenNow]

11 minutes ago, RememberSchiff said:

21 hours ago, MYCVAStory said:

 

Monday May 24, is also the first day of the virtual National Annual Meeting (NAM). 

Does that denote a sign from heaven, be it sunshine or storm, given the concurrence of events? Quite a coinc-adink. 

[elitts]

9 hours ago, Eagle1993 said:

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. 
 

I kind of thought this drive to pass look-backs would fade fairly quickly when people started connecting the dots and imagined what could happen when school districts and state governments started getting sued.  It's only a matter of time until someone tries suing a state government over "campus rapes allowed by permissive, state-run schools, who abdicated their duty to protect their students".

6 hours ago, ThenNow said:

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.

I have to think that most LCs have insurance policies of their own to protect against losses due to lawsuits. (I know mine does)  I mean, they are poorly enough run that I can easily believe some Councils don't, because they thought "they were covered by national", but I have to hope that would be a rarity.

3 hours ago, johnsch322 said:

Here is a link to what the TCC feels that an abuse is worth for negotiating purposes. 

Boy Scouts of America: Pachulski Stang Ziehl & Jones (pszjlaw.com)

Couple that with the table 

Unique and Timely Abuse Claim Count by Local Council & Allegation Rows 1-264 (in white) list Abuse Claims against individual Local Councils. Rows 265-1,267 (in blue) list Abuse Claims against more than one Local Council

Contained in:

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/213bd53f-b44f-45c9-97fc-246bcb7ca06b_4108.pdf

And now we can see how the TCC came to value the abuse claims at 103 Billion

I'm curious to know if the awards will be adjusted for time for those people who were abused decades ago.  It would seem like they probably should, but who knows.

Also, if we are talking about awards in the situation of a bankruptcy, it would seem like a more realistic target would be the roughly $290k that the Catholic Church has averaged.

2 hours ago, Muttsy said:

A cram down has never been done in a sexual abuse bankruptcy and she won't do it here.  

Yes, This has been repeated ad nauseam by another poster.  The problem with this little saying is that we aren't talking about some mountain of past precedent spanning the last 50 years that would need to be set aside; rather, pretty much all you are talking about are a couple dozen Catholic Church bankruptcies since 2004. Given the scope of this one, it would be a pretty easy thing for a judge to say "This is a functionally different situation than the past CSA bankruptcies".

Unless of course you can point out some situations where bankruptcy judges actually denied discharge when an agreement couldn't be reached?

[MattR]

2 hours ago, RobertCalifornia said:

Just glancing through the council assets, I was a bit surprised that a lot of camps were unrestricted.

How can you tell if it's restricted? I couldn't find the description of letter codes that went with each camp.