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


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If this was only about BSA and LC physical assets, I could believe a timetable for framework might happen in the near future.  However, with MOST of the potential recovery coming from insurers that will not be pressed and will fight to the end, I just don't see that aspect being resolved anytime soon.  

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9 minutes ago, Eagle1970 said:

However, with MOST of the potential recovery coming from insurers that will not be pressed and will fight to the end, I just don't see that aspect being resolved anytime soon.  

Could the following plan a) go to a vote and b) be approved with ballot language to the effect of:

  1. BSA will put in $XXX million
  2. Local councils will put in $YYY million (or better still, a list of how much EACH council puts in, so ABC Council puts in $1 million, DEF Council puts in $2 million)
  3. ALL insurance rights are placed into the Settlement Trust (which is almost verbatim the current language of the plan), specific amounts TBD?
  4. This plan does NOT pertain to COs and they are NOT listed as "Protected Parties" or "Released Parties"?

That would absolutely be throwing all the insurance companies and the COs under a big, giant bus. The insurance companies, meh. But if the COs aren't covered as part of this, oh my.

Edited by CynicalScouter
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1 minute ago, CynicalScouter said:

Could the following plan a) go to a vote and b) be approved with ballot language to the effect of:

  1. BSA will put in $XXX million
  2. Local councils will put in $YYY million (or better still, a list of how much EACH council puts in, so ABC Council puts in $1 million, DEF Council puts in $2 million)
  3. ALL insurance rights are placed into the Settlement Trust (which is almost verbatim the current language of the plan), specific amounts TBD?
  4. This plan does NOT pertain to COs and they are NOT listed as "Protected Parties" or "Released Parties"?

I could also imagine that they either are settling on the restricted assets (which means BSA giving up the OA$ and some HA bases) OR are agreeing to binding arbitration.  I do not see the TCC giving up the fight over the hundreds of millions of BSA restricted assets through mediation.

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4 minutes ago, CynicalScouter said:

 But if the COs aren't covered as part of this, oh my.

And for me that is a VERY big OH MY!

When I was a DE one of the selling points to COs was that the charter fee to the BSA covered insurance that would protect the CO from things like this. If memory serves, language in the Charter Agreement covered this. If National, and the LCs to a lesser extent, will not honor their word and their contract, maybe BSA needs to die. I was taught "A Scout is Trustworthy, Loyal... Brave...."

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5 minutes ago, Eagle1993 said:

I do not see the TCC giving up the fight over the hundreds of millions of BSA restricted assets through mediation.

Possibly. I guess my question was, regardless of what that BSA number is ($XXX million does/doesn't include HA bases), would that be enough information for a vote to go forward and be approved? In other words, will victims vote for a number (insurance contribution to the settlement fund) that is unknown at this time/to be litigated later? Or will they hold that against BSA and demand that number be decided before they vote yes?

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3 minutes ago, Eagle94-A1 said:

If memory serves, language in the Charter Agreement covered this. If National, and the LCs to a lesser extent, will not honor their word and their contract, maybe BSA needs to die.

I don't think it is that BSA won't honor it IN THE LONG RUN. I think the point is that National and the LCs walk away from the bankruptcy now IN THE SHORT TERM, and the COs will be covered by insurance for future legal claims in the regular tort system down the road.

I'm just thinking about the hundreds of Catholic parishes, the VFW halls, many/most of which have never even shown up as a parties or filed notices of appearance here. LDS and the Methodists are obviously the two biggest COs, but what about the rest? It's going to get messy, quick if there is a BSA/LC deal. It would just look really, really bad.

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So if potential insurance proceeds are put into trust, is there anything to stop insurers from simply denying claims for lack of proof, or whatever reason they choose.  Deny is what they do best.

 

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18 minutes ago, Eagle1970 said:

So if potential insurance proceeds are put into trust, is there anything to stop insurers from simply denying claims for lack of proof, or whatever reason they choose.  Deny is what they do best.

Under the plan, the Victims Compensation Trustee appointed by the court would review all claims and determine value based on a abuse matrix established/approved as part of the plan. The insurance companies would/could demand that each claimant provide proof, but it would be the Trustee who decided things.

EDIT: decided things such as whether there was sufficient proof to allow the claim, how much the claim is valued at, and how much will actually be paid out.

FOR EXAMPLE (again, being very gentle here and using examples of physical harm rather than sexual because there are young people on these boards)

Let's say three claims are filed against BSA for loss of a leg at an HA camp. Based on the abuse matrix, loss of a leg = $800,000 to $1,000,000.

1) Claim 1 did NOT provide enough proof or evidence. The Insurance companies object, the claimant provides additional evidence, and the Trustee finds in favor of the Claimant, BUT finds that because it was not a whole-leg amputation, the victim is awarded $800,000 MINUS what they were already promised/paid by BSA/LC, so the insurance company pays $800,000-BSA/LC contribution. If the insurance company can prove it had some kind of cap per incident (e.g. $500,000) then there may be a max payout from insurance.

2) Claim 2 did NOT provide enough proof or evidence. The Insurance companies object, the claimant cannot provide ANY more information. The Trustee finds against claimant for failure to provide sufficient proof.

3) Claim 3 DID provide enough proof or evidence. The insurance companies object anyway, and the Trustee finds in favor of the Claimant. Because it was a full leg amputation, $1,000,000-BSA/LC contribution.

Multiply this process over 82,500 claims, and this is going to take years.

Edited by CynicalScouter
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My take for what is worth is that the National and the LC's have sweetened their offer but TCC is holding out for a bit more.  The insurance company's (except Hartford) won't be included nor the CO's.  Hartford wants to be part of the settlement and maybe has guaranteed the 650 million with no caveats and possibly increased the amount (insurance company's have been part of the mediation).  If this is what is presented it will pass the vote (at least I would vote for it).  Then the lawsuits can be filed against the insurers and the CO's.

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14 minutes ago, CynicalScouter said:

In other words, will victims vote for a number (insurance contribution to the settlement fund) that is unknown at this time/to be litigated later? Or will they hold that against BSA and demand that number be decided before they vote yes?

I am neither a lawyer nor any sort of expert in this litigation, but reading the threads on this over the last year, it seems like the mismatch of interests between the insurance companies and BSA has been a driver of delay.  BSA wants out of bankruptcy fast, but insurance companies interests may be served by simple delay.

It has sort of felt like a catch 22 — if insurers feel like they might pay less by dragging out, it is really is in their interest to do so.  But dragging out could lead to the ‘BSA running out of money’ scenario that has been posited.  If that happens, that clearly hurts BSA’s interest in the bankruptcy process and there has been discussion if that scenario results in victims being worse off as well.  I interpreted the Hartford deal as BSA trying to cut that knot, but the only way it could entice the insurer to give up a delay strategy was to cut a deal that was much lower in total settlement than many believed it should be.  

But if a scenario goes where a deal covering BSA is made, leaving out the insurance companies, could that change the calculus on their part regarding whether delay is the right strategy anymore?  

Let’s say for this hypothetical scenario that BSA (using that generically for National and local councils) comes up with a number and gives up enough assets (camps, HA bases, etc.) that the number is viewed as significantly better than the first proposals and the sacrifice of assets sufficient to address the (personally I think legitimate) desire on the part of individuals harmed by abuse in scouting that the organization not seem to walk away from this without significant losses on its part.  That plan is approved, and the trust opens with those assets and the ability (and legal responsibility) to fight with the insurance companies for their (substantial) contribution.

Would the outcome of that fight between victims representatives/trust and the insurance companies be known when the BSA deal was made? No.  That means that there would still be a lot of uncertainty and a vote to approve it would likely be a tough vote to cast.  But it would turn the insurance issue into a one-on-one fight between victims representatives/trustees and the companies, and it would potentially change the calculus around delay — since the pressure point of BSA running out of cash and the possibility for that to shift the landscape around the insurance companies costs would be gone.  Would they (the insurance companies) then be likelier to agree to higher numbers to settle?  I don’t know, but it does seem like a two stage deal might untwist some of the countervailing incentives that have been tying this up for more than a year now.

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42 minutes ago, CynicalScouter said:

I don't think it is that BSA won't honor it IN THE LONG RUN. I think the point is that National and the LCs walk away from the bankruptcy now IN THE SHORT TERM, and the COs will be covered by insurance for future legal claims in the regular tort system down the road.

I think the big shock to our long term COs was BSA stating they were not covered by BSA insurance prior to 1976.

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

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Chartered Organizations are not additional insureds or co-insured under the Hartford policies issued to BSA prior to 1976. The Hartford policies issued to BSA in 1976 and 1977 are ambiguous as to whether Chartered Organizations are additional insureds.

 

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6 minutes ago, Eagle1993 said:

I think the big shock to our long term COs was BSA stating they were not covered by BSA insurance prior to 1976.

The LDS already left, so not so much worried there. But the Methodist Churches? Yeah, there's a reason they showed up and objected.

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1 hour ago, CynicalScouter said:

will victims vote for a number (insurance contribution to the settlement fund) that is unknown at this time/to be litigated later? Or will they hold that against BSA and demand that number be decided before they vote yes?

This goes directly back to the "Kosnoff has no influence" quip. I believe the vote on any possible deal will turn on how it is presented to the claimants by the TCC, Coalition and AIS. Let's be honest, the Committee and the attorneys are the filters and the hands that guide, which is appropriate. There are only a few thousand boneheads like me paddling our wee dingy in open water.  

Btw, when I say "TCC" I mean the committee of men, not necessarily their counsel. They represent us and the attorneys advise them. I trust those 9 guys to assess, dissect, analyze and communicate their thinking to us when the time comes. "There is wisdom in the multitude of counsel."

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8 minutes ago, ThenNow said:

Let's be honest, the Committee and the attorneys are the filters and the hands that guide, which is appropriate.

Yes, which is why I'm very interested to see if TCC/FCR (maybe Coalition?) adds into the ballot packet a statement to the effect of "This in our opinion is the best BSA can offer." or even something as far as "We encourage a yes vote."

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New mediation report https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/562a5663-2140-4815-a2c4-13de110eedda_5287.pdf

Cancel June 11 altogether.

The Mediators, having conferred today with certain of the Mediation Parties, including the Debtors, the Ad Hoc Committee of Local Councils, the Tort Claimants’ Committee, the Coalition, the Future Claimants’ Representative and insurers, suggest that the status conference scheduled for Friday, June 11, 2021, be cancelled to permit discussions among the Mediation Parties to continue without interruption.

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