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

[Muttsy]

It is highly unlikely Kosnoff would be supporting any deal and is furious that she is continuing to drag the case out by not issuing rulings. He said so quite colorfully last night on Twitter "I Can't Go for That"

 

[Eagle94-A1]

Isn't his commentary contempt of court?

[johnsch322]

25 minutes ago, Eagle94-A1 said:

Isn't his commentary contempt of court?

Not that I can see as there is no gag order in place saying there can be no comments on the case.  This would be a judge's order and would be contempt if in place.  It definitely is contempt for the court and very inflammatory.

Edited May 24, 2021 by johnsch322

[Muttsy]

Century Indemnity is a Pennsylvania corporation and regulated by the PA insurance commissioner. Century Indemnity has 300 employees across all locations, meaning not that many jobs in PA.

Century is a subsidiary of Chubb LTD, which is a Swiss corporation. Chubb reincorporated itself in Switzerland from NY state in 2015. Its principal headquarters are in NYC not PA. 

When I first examined this fact, I thought that it did so because Switzerland has a corporate tax rate of 8% as compared with a combined US and NY corporate tax rate of 32% (probably a little less that that after the tax reform act of 2017). This gives Chubb a big advantage over US-based competitors like Hartford, Berkshire Hathaway etc. Now I am thinking the decision to reincorporate in Switzerland was not just about lowering taxes.

It may have been done to get a more advantageous jurisdiction to one day file its own Ch. 11 bankruptcy, which by 2015 was clearly on the radar screen of all the big insurance companies that issued these "no-cap" policies decades earlier. And Chubb was sitting on the biggest pile of these toxic policies. 

Kosnoff has tweeted about this. Evan Greenberg, Chubb's CEO and Chairman, said in Chubb's annual report last December that Chubb had been lobbying against window legislation around the country "for years." It would be interesting to see how much Chubb spent on lobbyists tasked with screwing survivors. Chubb is probably still spending millions on the losing effort.

BSA also spent millions on lobbyists in an effort to defeat window legislation in NY, NJ, CA, GA, etc. https://www.washingtonpost.com/powerpost/boy-scouts-lobby-in-states-to-stem-the-flow-of-child-abuse-lawsuits/2018/05/08/0eee0a44-47d8-11e8-827e-190efaf1f1ee_story.html

I agree that the PA Insurance Commissioner's Office should investigate. It should investigate how it approved the 1996 INA-CIGNA creation of the grossly underfunded "run-off" company Century Indemnity. It should turn over all the documents related to the ACE/Chubb acquisition of Century in 1999. That may turn out to be one of the greatest corporate blunders in history. Did the PA Ins Comm approve the deal because it trusted that Chubb would stand behind Century? What does it say now about Century/Chubb? 

Evan Greenberg took over at ACE around 2001. For the next decade, he tried ridding Chubb of Century. He tried peddling Century to some foreign insurance companies. Around 2009 he had a fish on the line, a British insurer who was willing to take Century off Chubb's hands. Interestingly, a bunch of brand name US insurance companies objected and successfully blocked approval of the sale by the PA Ins Comm. The details of that story are murky but it appears that these companies had "treaty" exposure or possibly reinsurance exposure for those polices and didn't want Greenberg and Chubb to slither out from under the 1999 Century acquisition blunder. 

 

 

[DavidLeeLambert]

3 hours ago, ThenNow said:

4 hours ago, DavidLeeLambert said:

It's also different because it's actually intertwined with the prior Catholic diocese bankruptcies, and could potentially have a "second act" of dozens or hundreds of LC bankruptcies, and dozens or hundreds or even thousands of CO bankruptcies.

Does that sway your thinking in favor of cramdown or are [you] simply pointing out the additional distinction and complexity?

Just because the draft plan is opposed by one creditor committee in one smaller bankruptcy, no. If the TCC or Coalition turned around and tried to slow down the Guam diocese bankruptcy as well, I think both judges would see through that and just overrule the cross-case motions.

The prospect of a nationwide wave of LC and CO bankruptcies might not have much legal weight, either. Public policy, yes. If enough people lobby Congress to consider Boy Scouts "too big to fail", maybe they could could pass a law that helps move forward. Maybe a law that allows a congressionally chartered youth organization in bankruptcy to sell camps to the National Park system at a padded price (premium to go to survivors) and with continued access, in exchange for Federal monitoring of youth safety in its program; or opening the Armed Forces to federal civil liability for abuse that occurred at military bases, or in units organized on military bases, or for abuse committed by active-duty or honorably-discharged service-members.

But GSUSA's objection [D.I.3579] to the Disclosure Statement complains about their claim being lumped in a class with other creditors. And I can see the LCs, and any COs that had any direct legal contracts with National, arguing that their liability for indemnity should actually be higher priority than individuals' abuse claims, except for the (presumably) very small number of victims who were actually abused on an HA base, or at a National Jamboree, or by a National Council staff member. 

After the exclusivity window ends, perhaps someone will introduce a plan that divides the victims into multiple classes, perhaps by the strength of their evidence, or the nature of their abuse, or which states are implicated. Then there might be one group of victims that faces a cram-down, while another will be fully compensated.

[Muttsy]

Forwarded to me from a lawyer friend in the know. 

 

From: James Stang <jstang@pszjlaw.com>
Sent: Saturday, May 22, 2021 9:06 AM
Subject: BSA continuance

Colleagues,

At the mediators’ request, and over the objection of the TCC, the Court has continued the hearing scheduled for this Monday to June 4 at 10 a.m. EST. 

During last Wednesday’s hearing, the Court urged the parties to continue settlement discussions.  The TCC always intended to do so, and in fact continues to negotiate with the Coalition in an effort to find common ground for a joint plan.   The mediators, without any prior discussion with the TCC, contacted the Court by email stating that they thought continued mediation would be beneficial and sought a continuance of the Monday hearing.  The TCC promptly wrote to the Court objecting to the continuance and observed that the hearing last Wednesday served to inform the parties and narrow the issues.  The TCC apparently was the only party who objected to the continuance.

The mediations are tentatively scheduled for two days next week and two days the week of May 31. The TCC appreciates all of your efforts and, within the limitations of the mediation privilege, will keep you advised of the status of the case.  

 

[ThenNow]

22 minutes ago, Muttsy said:

The mediators, without any prior discussion with the TCC, contacted the Court by email stating that they thought continued mediation would be beneficial and sought a continuance of the Monday hearing. 

Bottom of the ninth. Two outs. Tying run on first. Ace reliever on the mound. Playoffs on the line. Coach is pacing, vexing over the DH options..

Jimmy: Put me in coach. I’m ready now! I know I can do it. Please coach. Gimme a chance! 

Coach: Jimmy. I appreciate your spirit, son, but you’ve struck out every at bat the all season and the playoffs are on the life.

Jimmy: Please coach. I promise I can do.

Coach: Ok, slugger. Let’s see what ya got. Watch the high heat and that splitter...

What a steaming pile of chili dog all over my lap.

Edited May 24, 2021 by ThenNow

[Muttsy]

I have a difficult time seeing how further mediation at this moment can possibly yield a deal or even meaningful progress. Stang was right to oppose it. 

Just one example of BSA's countless missteps was the Hartford $650M deal.

The BSA lawyers did not diligence the fact that Century did not have even a third of the $$ needed to prevent the clawback of 50% by Hartford. It was a sham deal and Hartford is laughing all the way back to the board room. It was such a colossal blunder, it ranks high in the list. And the mediators facilitated it according to the WSJ article. 

BSA desperately wants to control the bankruptcy and keep its plan alive but the Hartford deal cannot be undone by BSA. BSA is bound. Yet no plan will ever garner sufficient votes if it contains the Hartford buy-back deal.

As they say, "it seemed like a good idea at the time."

The only way forward is to end exclusivity and see what the Coalition/TCC/FCR plan brings to the floor. 

[johnsch322]

10 minutes ago, Muttsy said:

I have a difficult time seeing how further mediation at this moment can possibly yield a deal or even meaningful progress. Stang was right to oppose it. 

I think all or most all that is contained in the TCC's plan is known to the BSA's legal team as most of it would have been brought up in negotiation.  BSA legal felt after the May 19th they were going to lose exclusivity. I am assuming that the TCC gave their plan for contributions from the LC's to them and National. BSA National and the LC's are very afraid of the the TCC's plan knowing that it will make legal and logical sense and have the backing of the majority of the claimants.  They had a meeting with their legal, gave up a little more, called the mediator who called the judge so they could get the delay and will now present a little morsel.  TCC knows it won't be enough and so they were against it.  Now we wait once again until June 4th. BSA will say look we are negotiating and the mediators will agree.  TCC will argue there hasn't been enough progress and once again the ball will be back in the judges hands.  Let us all hope that she doesn't pass it back to the BSA or the mediators but finally gives it to the TCC.

[ThenNow]

18 minutes ago, Muttsy said:

The only way forward is to end exclusivity and see what the Coalition/TCC/FCR plan brings to the floor. 

Agreed and after waiting another two bloody weeks. My friends in the know are more skilled at patience then I am and have a "let's see what happens" attitude. I'm trying to borrow some of that while we twiddle. I don't disagree with Mr. K on this one. Not even a teeny. I might have said it slightly differently, but I thought it. 

[Eagle1993]

Riddle me this, Batman.  BSA is saying they are out of cash end of August.  They just delayed the hearing which means everything is delayed 2 weeks.  How do they complete this now by the end of August?  
 

I expect that if the TCC’s plan becomes public, BSA is going to have a nightmare on their hands as it will likely show a large number of council camps sold. They will hear screaming from volunteers who are not aware of what is about to happen. Perhaps, just perhaps this means BSA will really try to settle over the next two weeks.  They do not want that TCC plan made public if they can avoid it. I’m hopeful this means we are getting close to the beginning of the end. 

[ThenNow]

40 minutes ago, Eagle1993 said:

Riddle me this, Batman.  BSA is saying they are out of cash end of August.  They just delayed the hearing which means everything is delayed 2 weeks.  How do they complete this now by the end of August?  

It was clear during the hearing that the BSA has taken multiple opportunities to press maximum statutory timeframes for some of their responses, as well as held out on requests from the TCC they will have to cough up anyway.  I go back to the discussion about Summit and their refusal to prove restricted status by delivery documents. I have tried to get inside the Riddler's war room mentality, but my head ends up aching. I don't get a bunch of it, unless it is "embarrassment-driven." It sounds silly just reading it.  

41 minutes ago, Eagle1993 said:

I expect that if the TCC’s plan becomes public, BSA is going to have a nightmare on their hands as it will likely show a large number of council camps sold.

I also wonder about the revelation of more LC asset protection trusts set up during the two years preceding filing.

[MattR]

4 hours ago, Eagle94-A1 said:

Isn't his commentary contempt of court?

I sure don't see how it helps his clients or his place "at the table. " 

[ThenNow]

21 minutes ago, MattR said:

I sure don't see how it helps his clients or his place "at the table. " 

He's not "in" court or before the judge. He's the war hammer beating the drum. Remember, he's one of many and not getting face time with the judge. Among his cohort are surgeons and cat herders and skilled craftsman. I'm beginning to understand his role as we go along. I repeat myself, but this man has made a career of representing sexual abuse survivors, has seen and heard untold horror stories, and knows a thing or 100 about this stuff. Crazy like a fox, me thinks. When he beats the drum, it sends ripples through the case. Others ride the waves. Okay. Enough poetry for one day. Is there such a thing? I hope not.

Edited May 24, 2021 by ThenNow
Oops.

[Muttsy]

Representative Speier has expressed interest in using her perch as a senior member of the House Oversight Committee to investigate BSA. See her Open letter to colleagues attached. 

I don't hold much faith in politicians but at least she is making the right sounds. 

SIGN ON_ Speier Letter to Boy Scouts of America re Reports of Child Sexual Abuse – DearColleague.us.pdf