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


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Posted (edited)
17 minutes ago, fred8033 said:

Yeah, that's legal advice.  You can't split the two. 

I'm really not understanding your point and looping back to a supposed legal or strategic advice/advantage argument re HABs being restricted (if not a problem showing a cash sinkhole). Here is the simplest way to look at it.

BSA: "I told you five times. The door is locked."

TCC: "I don't believe you. I believe it's open."

BSA: "Locked."

TCC: "Open."

BSA: "Locked."

TCC: "Open."

BSA: "Listen carefully! It is locked!"

TCC: "Okay. Okay. Let me try the door." 

BSA: "No freakin way. I told you, it's locked."

Hello...???

Edited by ThenNow
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4 minutes ago, CynicalScouter said:

 

Give me a break. Some of this may be legal advice, but it is more likely that they are being advised that the MOMENT the financials are released, the Shell Game is over, so stall, stall, stall as long as you have to and hope they can get one over on the court.

You keep saying this but, having worked for one of JPM’s competitors in the real estate debt asset management space, I just find it incredibly hard to believe there was massive fraud.
 

You’re alleging front page of the Wall Street Journal for weeks, huge fines, people are going to prison fraud.
 

JPM’s legal and compliance departments would have seen it. Outside counsel would have seen it.  Their third party asset manager would have seen it. 

Is BSA upstream from Arrow WV and have equity to lose from a forced sale? Maybe.  Does JPM have a priority lien? Maybe. Did JPM make a corporate loan and not a mortgage? Maybe. Did some rogue banker somehow get through that many checks to commit fraud and risk prison on a big, but not world changing, deal so he could juice his bonus a little bit? Doubt it. 

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Posted (edited)
4 hours ago, vol_scouter said:

The Summit Bechtel Reserve is valued at $350 M [unpaid loan money to the BSA to purchase it is not accounted for in that figure] while Sea Base, Northern Tier, and Philmont all three together are valued at about $60 M.

What is the valuation split?  Sea Base and Northern Tier are great, but their properties are pretty small and buildings target youth camper programs.  Anyone buying them would need to do a major reconstruction; effectively a tear down and re-build.   And some may be blocked from re-use due to restrictions (too near to lake, bordering BWCA, etc) ...  I'd guess NT and SB are worth land value minus tear down / cleanup costs.  So being under $60M for those two is easily clear.  

I really expected Philmont to be worth more, but is it protected by national park or is it barren land not in demand except as wilderness use.   Or is Philmont reduced by other debt? ... I tend to remember something about that.
 

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6 minutes ago, fred8033 said:

Yeah, that's legal advice.  You can't split the two. 

Sure I can. I've sat in on similar conversations.

  1. Company officials do NOT want to disclose certain information, so they approach their counsel and ask what defenses they can lodge against disclosure. The attorneys provide the defenses and execute on them. There, the company officials are driving the litigation/defense.
  2. The attorneys approach the company officials and advise them they need to avoid disclosure. The company officials agree. There, the attorneys are driving the litigation/defense.

To take the West Wing example (which again, is a bad one because it involved CRIMINAL liability) Toby wanted to blurt it all out and the lawyer told him to shut his mouth. That has Fifth Amendment and similar implications.

This is a civil matter. BSA is free to share the information it has regarding Summit at any point in time. It simply refuses to do so. And it is becoming clearer and clearer that, rather than the attorneys telling BSA to not disclose, it is BSA officials (donors?) telling attorneys to find a way to prevent them from having to disclose.

Two different scenarios.

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2 minutes ago, BlueandSilverBear said:

You keep saying this but, having worked for one of JPM’s competitors in the real estate debt asset management space, I just find it incredibly hard to believe there was massive fraud

I offered the alternative argument elsewhere: that JPM and BSA are not hiding anything fraudulent, but incredibly embarrassing, namely, that the debt owed on Summit is actually far, far worse than is being acknowledged (JPM is holding the note on SOME of the debt, but the rest is in those Arrow, WV notes and local government bonds or elsewhere), that it is a big deep hole into BSA has dumped hundreds of millions and is so far underwater it will never, ever see a breakeven point in our lifetimes.

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3 minutes ago, CynicalScouter said:

....  rather than the attorneys telling BSA to not disclose, it is BSA officials (donors?) telling attorneys to find a way to prevent them from having to disclose ....

I'd find it hard to believe it's a clear split.  

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Posted (edited)
2 minutes ago, fred8033 said:

I'd find it hard to believe it's a clear split.  

I find it incredibly plausible that BSA officials are telling the lawyers to do whatever they can to not let the Summit financials out. BSA top brass have been in denial about what a financial pit Summit is for so long they are in too deep.

If it was made clear, in stark relief, that (for example) BSA dumped $600 million into Summit and still have that much debt on or off the books, it would be horrific and hard to justify NOT turning the darn thing over to the TCC and saying "sell it and best of luck."

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2 minutes ago, fred8033 said:

I'd find it hard to believe it's a clear split.  

 

1 minute ago, CynicalScouter said:

I find it incredibly plausible that BSA officials are telling the lawyers to do whatever they can to not let the Summit financials out. BSA top brass have been in denial about what a financial pit Summit is for so long they are in too deep.

I can't speak to the inner workings of JPM or the facts of this deal, as I've said. As a claimant who wants to get on with it and who wants the BSA to come to the table as they said they would/say they are, something stinks with this persistent non-disclosure. It just does. I guess you can make the case for it being strategic, but what is that strategy if they are simultaneously bleeding themselves dry, being pounded to release documents on a fat calf asset they say is restricted and they have to know it's required of them to retain the alleged restricted status? What am I missing? The BSA says it's restricted but refuses to prove it, which is their burden? Let's say I agree that it isn't fraudulent. Why not prove it? I'm left with the money pit argument, which is classic "cut off your nose to spite your face" behavior. Embarrassment is the motive for failure to carry your own burden of proof to establish a restriction on a major asset in bankruptcy? Okie dokie.

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20 minutes ago, CynicalScouter said:

...  it would be horrific and hard to justify NOT turning the darn thing over to the TCC and saying "sell it and best of luck."

Naive question ... but you keep saying just turn the thing over to TCC ... BSA can't do that right ?  There are multiple creditors in line?  COs.  LCs.  Girl Scouts.  Other victim representatives.  Or are you saying TCC gets to take title and sell ... then hand over money to others creditors based on their plan?  

I ask as one of the key things in business is controlling who has the dollars.  Who ever has the dollars in their bank account has a lot of control?  During graduate studies I remember dealing with a business man who was talking about a payment his company got accidentally (not me).   The guy said he's give them back the money as it was theirs, but he was going to wait and see if they asked three times.  He was betting they'd give up after two.  ... They gave up and his small company (insurance firm) was enriched by $10,000+.  It creeped me out, but I've seen that before.  

I was wondering if it is a figure of speech or if TCC really would get a property title handed over.  Or if there is another group that would get the property title and sell on behalf of the creditors.

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2 minutes ago, fred8033 said:

Naive question ... but you keep saying just turn the thing over to TCC ... BSA can't do that right ? 

Sorta. The JP Morgan would have first dibs on it based on whatever loans/debt are on it. Then, if there's any value left, it would go into the Abuse Settlement or its value divided among ALL creditors with TCC/victims getting a fraction; that is TBD.

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16 minutes ago, ThenNow said:

The BSA says it's restricted but refuses to prove it, which is their burden? Let's say I agree that it isn't fraudulent. Why not prove it?

Because of the embarrassment factor. Because it could be simply stubborn ("We are not going to let those vulture lawyers get our prized possession.") etc.

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Posted (edited)
10 minutes ago, CynicalScouter said:

Because of the embarrassment factor. Because it could be simply stubborn ("We are not going to let those vulture lawyers get our prized possession.") etc.

I've had a company, well two, get consumed. One by a true insider snake in the recording and publishing industry, the other the bankruptcy sale I mentioned. The sell-off in bankruptcy was precipitated by a $20M breach of contract award that was later overturned too late for a rescue. Security tied to intellectual property assets, which is a complicated story. Anyway, we owners would never have considered hiding a financial advantage out of embarrassment over unwise decisions or poor financial management. That is, unless there was a legal or IRS problem lurking in the shadows. It's crazy to me, but I suppose this is what some of you have been saying about BSA top brass and the way they roll.

Edited by ThenNow
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5 minutes ago, fred8033 said:

During graduate studies I remember dealing with a business man who was talking about a payment his company got accidentally (not me).   The guy said he's give them back the money as it was theirs, but he was going to wait and see if they asked three times.  He was betting they'd give up after two.  ... They gave up and his small company (insurance firm) was enriched by $10,000+.  It creeped me out, but I've seen that before.  

 

This stupidity strategy is employed quite a bit. A lot of financial institutions play it. I've encountered this kind of nonsense with personal accounts, trying to administer estates, and in business. 

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1 minute ago, yknot said:

This stupidity strategy is employed quite a bit. A lot of financial institutions play it. I've encountered this kind of nonsense with personal accounts, trying to administer estates, and in business. 

I'm sure I mentioned the class action I lead against an insurer for wrongful denial of depression treatment claims. That they're MO, as well. Deny the claim until the patient drops it from exhaustion, frustration, ignorance, death or they are forced to pony up after independent reviews, aggregated appeals and, eventually, a law suit if it ever gets to it. That, of course, is rare.

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If we can return to the Century whistleblower for a moment:

Wouldn't it be reasonable to pare down these supposed false claims now?  While the point was raised earlier that that wouldn't end up changing the lump sum of the settlement, it would impact the amount of award to each survivor.  The numerator doesn't change, but if the denominator gets smaller, you're left with a bigger award per survivor.

Isn't it in the best interests of both sides to weed out these allegedly false claims as soon as possible?

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