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


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50 minutes ago, David CO said:

I'm not sure what this means for the councils and CO's.  Are the insurance companies off the hook now when the LC's and CO's are sued under the "toggle" plan?

 

"Under the agreement, the Boy Scouts and its local councils will release Hartford from any obligation under policies it issued, Hartford said."

https://www.reuters.com/article/usa-boy-scouts-hartford-idUSL4N2M93YJ

as above link mentions, there are other insurers such as Century/Chubb that have not reached agreement.

"The agreement is related to BSA’s Chapter 11 bankruptcy and will take effect once certain conditions are met, including confirmation of the BSA’s global resolution plan, execution of clearances by the local councils, and approval by the abuse plaintiffs and bankruptcy court. Hartford and the BSA hope to get court approval in the third quarter of 2021, but this could be delayed due to various procedural reasons. "

https://connecticutdailynewswire.com/2021/04/16/the-hartford-agrees-to-an-settlement-with-the-boy-scouts-of-america-and-declares-the-anticipated-growth-and-disaster-losses-of-the-primary-quarter-of-final-12-months/

Edited by RememberSchiff
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44 minutes ago, David CO said:

I'm not sure what this means for the councils and CO's.  Are the insurance companies off the hook now when the LC's and CO's are sued under the "toggle" plan?

 

Good question.  It looks like this is 1 of 2 major insurance groups for both National & LCs.  I'm not sure if this only applies if the claimants go for the primary plan.

Insurer Hartford to pay $650 million for claims linked to Boy Scouts of America sex abuse cases | WTVB | 1590 AM · 95.5 FM | The Voice of Branch County (wtvbam.com)

 

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My understanding is that the BSA employed the insurors and applied it to the membership who paid dues to the BSA.  So I would think that such a settlement would allow the insurance companies to pay now and absolve their responsibilities.  Just my opinion for what it is worth on this topic.

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That sounds like a lot of money, and I suppose in absolute terms it is, but with 84,000 claimants that's only $7738 per claimant.  Combined with the original BSA offer that's less than $14000 per claimant, which doesn't sound like the level of recompense most folks would be looking for.

Edited by T2Eagle
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58 minutes ago, T2Eagle said:

That sounds like a lot of money, and I suppose in absolute terms it is, but with 84,000 claimants that's only $7738 per claimant.  Combined with the original BSA offer that's less than $14000 per claimant, which doesn't sound like the level of recompense most folks would be looking for.

Victims would be wise to remember that this was a mediated settlement between one insurer and the BSA, and did NOT include the TCC.  The total amount of the settlement will be the focus for many but victims should await some perspective from the body that is advocating for them and not from the BSA.  What's critical isn't the amount of the settlement with one insurer only but the total exposure of that insurer.  Think about it this way, if it was the insurer who was covering YOU at the time of your abuse, what percentage of that exposure is being offered in this deal?  Would you accept say 10-20 cents on every dollar of your coverage?  Considering the hellstorm of fees that will rain down onto some insurers when they have to defend themselves in court, or answer to their regulators, $650 million might be a hell of a bargain.  I suspect we will hear a reaction from the TCC and its professionals before too long. 

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10 hours ago, yknot said:

I wondered if that might be some kind of dystopian solution too but it does seem like there would be too much scorched earth for scouting to survive long term.

While it would prolong smaller cases, it would allow BSA to continue and scouting in many, many states to continue. 

It might also serve as a crucible shedding light on a rather sleazy solicitation of victims that exploded cases from 14,000 to 85,000.  Sometimes it's best to call the situation and force the details to be worked through instead of accepting the facts on the face. 

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11 hours ago, MYCVAStory said:

Victims would be wise to remember that this was a mediated settlement between one insurer and the BSA, and did NOT include the TCC. 

As I said previously, what confidence and relative respect I had for BSA National is dwindling.  Back room deals like this reek of self-dealing and self-preservation. I continue to see near singular focus on one prong of the two Chapter 11 goals, and not “equitably compensating all abuse victims.” As someone who’s been both and attorney and executive in for profits and NGO’s, I know the proverbial back room is part and parcel of business. However, this is not your run of the mill merger/acquisition or squabble over assets. It’s sexual abuse of tens of thousands of boys in the Boy Scouts of America. I feel the same way about telling the judge you’ll file a new Plan on a Monday and dropping it Thursday, with no indication of its contents nor collaboration with the official representatives of the claimants who put you into bankruptcy. It looks terrible. Feels worse.

11 hours ago, MYCVAStory said:

I suspect we will hear a reaction from the TCC and its professionals before too long. 

I can’t wait!

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50 minutes ago, ThenNow said:

As I said previously, what confidence and relative respect I had for BSA National is dwindling.  Back room deals like this reek of self-dealing and self-preservation. I continue to see near singular focus on one prong of the two Chapter 11 goals, and not “equitably compensating all abuse victims.” As someone who’s been both and attorney and executive in for profits and NGO’s, I know the proverbial back room is part and parcel of business. However, this is not your run of the mill merger/acquisition or squabble over assets. It’s sexual abuse of tens of thousands of boys in the Boy Scouts of America. I feel the same way about telling the judge you’ll file a new Plan on a Monday and dropping it Thursday, with no indication of its contents nor collaboration with the official representatives of the claimants who put you into bankruptcy. It looks terrible. Feels worse.

I can’t wait!

I do wish the BSA was working more directly with the TCC, but I see this as BSA attempting to get all of the payers (LCs, insurance companies, COs and National) to pull together a settlement offer.  On the other side of this is really the TCC & FCR who are likely working on detailed expectations of what they think the National BSA, LCs, COs and insurance companies should pay.  This will be a negotiation back & forth.  I'm just happy to see that we have finally seen an offer from the insurance companies (understanding it probably isn't high enough for an agreement yet).

The reddit thread below describes the current status of the offer pretty well.  I do question the author's statement that BSA is working directly with sub groups within the TCC (especially Kosnoff).  Kosnoff was shocked (and not necessarily happy) about the Insurance offer so I'm not sure if he has really been involved with BSA discussions.

While I am still hoping for an overall settlement that covers all parties, I'm pessimistic it can happen.  I think we should be prepared for a decade of lawsuits within various aspects of the BSA (LCs, COs and insurance companies).  

 

 

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12 hours ago, MYCVAStory said:

Victims would be wise to remember that this was a mediated settlement between one insurer and the BSA, and did NOT include the TCC.  The total amount of the settlement will be the focus for many but victims should await some perspective from the body that is advocating for them and not from the BSA.  What's critical isn't the amount of the settlement with one insurer only but the total exposure of that insurer.  Think about it this way, if it was the insurer who was covering YOU at the time of your abuse, what percentage of that exposure is being offered in this deal?  Would you accept say 10-20 cents on every dollar of your coverage?  Considering the hellstorm of fees that will rain down onto some insurers when they have to defend themselves in court, or answer to their regulators, $650 million might be a hell of a bargain.  I suspect we will hear a reaction from the TCC and its professionals before too long. 

I'm a little unclear what you're saying here.  The insurance companies were not insuring the victims of abuse, they were insuring BSA against their own negligence in allowing the abuse.  I have no idea what the original coverage was or what exposure the insurance companies had.  BSA doesn't have much incentive to negotiate with a bias in either direction.  They're not going to be the party that collects the proceeds so they're probably not holding out for the last marginal dollar, on the other hand, the more money they procure the more hope that a final settlement can be reached. 

I suspect the insurers are probably the most pragmatic parties in this action.  They're only concern is how much they'll pay, and this is their business --- they have lots of experience and so know the costs of litigation for both sides, along with what their exposure is, and what amount could be expected to be paid at the end of a full litigation of their obligations.  They don't have the emotional involvement of the claimants nor do they have any vested interest in whether BSA survives or not.  It's possible BSA's lawyers weren't competent in their negotiation, but I suspect the insurers already know what this is going to cost them so the number they're willing to settle at is probably not very different no matter who is in control of bringing the claim.

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Some background on The Hartford and the BSA, Local Councils

More than 18 months prior to filing for Chapter 11, the BSA and local councils sued The Hartford in District Court in Dallas on June 5, 2018, saying that some sexual-abuse lawsuits were covered by insurance policies. The Hartford had denied its coverage obligations under the policies, including coverage for defense costs and indemnity payments associated with the lawsuits, the Boy Scouts of America said.

Under the policies, The Hartford agreed to cover sums that the Boy Scouts would be “obligated to pay as damages because of personal injury,” according to a civil lawsuit in federal court.

The Boy Scouts and its local councils were sued by youth participants for sexual abuse-related injuries during scouting programs. The victims said the Boy Scouts and local councils were negligent in failing to prevent the abuse and that some of these underlying sexual-abuse lawsuits are covered by insurance policies with The Hartford.

As part of the agreement, the Boy Scouts of America will release The Hartford from any obligation under policies it issued to the organization and its local councils.

More at source:

https://www.courant.com/business/hc-biz-the-hartford-boy-scouts-settlement-20210416-cv4hqbrt6zcbppjsftfnmmh7g4-story.html

P.S. 3/29/21  The Hartford rejected takeover talks by Chubb, also a BSA insurer.

Edited by RememberSchiff
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1 hour ago, T2Eagle said:

The insurance companies were not insuring the victims of abuse, they were insuring BSA against their own negligence in allowing the abuse. 

Since our units were paying for the premiums, one might think that we were the ones being covered.  At least that's what we were told when BSA charged us the fee.  Looks like we were covering national's assets, and we will be left twisting in the wind.

We need to remember that these victims of abuse were boy scouts.  Their registration fees paid for those insurance policies.

 

Edited by David CO
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2 hours ago, David CO said:

Since our units were paying for the premiums, one might think that we were the ones being covered.  At least that's what we were told when BSA charged us the fee.  Looks like we were covering national's assets, and we will be left twisting in the wind.

I believe the UMC Church encouraged their congregations to get involved in the lawsuit for this very reason. I hope other COs did the same, including the COs I have been involved with. I know my current CO has worked through the overall denomination. No idea what my church has done, but I did email about this situation.

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Per the Reddit post, this is one of the reasons I favor ‘testing’ a sampling of the claims filed and methods used by the Coalition, et al., through early discovery. Their desire to control the process was clear, which motive doesn’t in any way appear pure. I fear for the survivor claimants overall, if the TCC isn’t allowed the primary role. Just looking at the timing of dumped claims, the thousands of attorney and machine signatures and clearly manipulative advertising leads me to believe some digging is critical. The Coalition & Company may not have a legitimate majority. It is disconcerting.

 

Edited by ThenNow
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On 4/17/2021 at 11:58 AM, David CO said:

Since our units were paying for the premiums, one might think that we were the ones being covered. 

Scouts and Scouters may have paid for it, but we didn't hold the policy.

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https://www.insurancebusinessmag.com/us/business-news/boy-scouts-bankruptcy-plan-includes-new-insurance-estimate-252348.aspx

James Stang, an attorney representing the official torts claimants committee, which is charged with acting as a fiduciary in the bankruptcy case for all abuse victims, said the BSA’s valuation estimates seriously downplay the liability exposure of insurers.

“We think that is so understated it’s not even funny,” he said, adding that the TCC remains committed to a global resolution. “... Based on our review as of this moment, the plan is not satisfactory to us, but we continue to work toward one that will treat people fairly.”

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