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


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Posted (edited)
3 minutes ago, Muttsy said:

It also provides that National can dissolve an LC for any reason or no reason. Given this level of control by national, isn't the LC's corporate separateness illusory?

Again, use the example of the hiring of an Council Exec. Yes, National can ultimately pull the plug, but for day to day and operations, it is the local council board and local council president that are in charge of the SE. Just because National has the ultimate on/off switch doesn't mean it knows, on a daily basis, what the heck is going on or even controls what is going on.

So as I say, let's litigate it out; so far the judge hasn't.

Edited by CynicalScouter
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1 minute ago, Muttsy said:

Given this level of control by national, isn't the LC's corporate separateness illusory?

I completely agree.  Especially if the LC's assets are reverted back to the National upon termination of the charter.  LC's are not franchises.  

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Posted (edited)
3 minutes ago, johnsch322 said:

I completely agree.  Especially if the LC's assets are reverted back to the National upon termination of the charter. 

I know for a fact that while National's Charter and Bylaws say that all LCs must put that clause into the LC's local bylaws, dozens of councils have refused to do so, citing their independent status. National has not forced the issue and has issued charters to those LCs annually for years.

This cuts in favor of the argument that National doesn't "control" LCs.

Edited by CynicalScouter
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2 minutes ago, CynicalScouter said:

So as I say, let's litigate it out; so far the judge hasn't.

Kosnoff pushed hard for the TCC to start this litigation a year ago. He got voted off the island. That's when he went rogue. 

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Posted (edited)
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Century Indemnity Company will have Paul Hinton, David McKnight, and Robert Vanderbeek available to testify as witnesses.

So, what are Century's folks going to testify to?

Hinton will testify that many if not most claims are bogus/fail to make a valid prima facie claim. For a sneak preview of what that will look like: https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/874031_2174.pdf

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Across the law firms – Coalition, firms with high–volume signers, and Slater, Slater & Schulman – the same pattern exists: attorney-signed POCs were more incomplete, had more age inconsistencies, and generally were more likely to have at least one of the characteristics(incomplete, late, have multiples, or have inconsistent scouting age or state) identified in the table above. An expanded version of Table 3 that compares attorney signed and non-attorney signed claim characteristics by law firm is provided in Appendix A.

Vanderbeek is unclear, but will likely be put in to show that BSA's claim it will run out of money in August is bunk and that there's plenty of time to review the 82,500 claims or at least a portion to demonstrate they are

McKnight I think will repeat Vanderbeek: BSA can survive long enough for Century to cull through and yank what it alleges are false claims or those that don't have enough info to make a prima facie claim.

Edited by CynicalScouter
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Posted (edited)
54 minutes ago, Muttsy said:

veil piercing or alter ego, take your pick. 

The LC Charter agreement with was conditioned in part on the LC incorporating in its home state. It also provides that National can dissolve an LC for any reason or no reason. Given this level of control by national, isn't the LC's corporate separateness illusory?

That's not at all what the Charter Agreements say.  The model, but not universal, language which talks about LC assets reverting to BSA in the event of a loss of Charter has been quoted here many times. 

LCs are non-profit corporations, incorporated in and governed by the laws of their individual states.  BSA cannot dissolve those corporations, they're not owned by BSA.  And the Charter agreement, essentially a contract between two corporations, does not specify that BSA can renew or withhold a charter simply at its own discretion, it's silent about that issue.  What the limits of the contractual nature of the charter agreement are has never been litigated, and it could be different in each state depending on that state's laws governing both contracts and non-profits. 

The separation is not illusory, the extent of the separateness is at best not yet determined, but it is substantial.  

Edited by T2Eagle
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4 minutes ago, T2Eagle said:

The separation is not illusory, the extent of the separateness is at best not yet determined, but it is substantial.  

Yep. As the Ad Hoc Local Council Committee put it

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/60803144-4f8b-4d9d-98fd-e93ae9818079_4103.pdf

Provisions in the Debtors’ Bylaws and Rules & Regulations do speak in terms of a “reversionary interest” in certain assets of Local Councils. However, these provisions clearly do not invest a hypothetical chapter 7 trustee with “responsibil[ity] for liquidating [a] Local Council’s assets,” as the TCC contends,6nor do they provide an apparent source of recoveries for holders of Abuse Claims against the National BSA.At most, these provisions may provide a contractual argument that the Debtors have a reversionary interest in Local Council assets, but any such interest is subject to, among other things, contract-law defenses as well as defenses under state franchise and charitable corporation laws. Importantly, as described further below, any such contractual interest –and the defenses thereto –also varies with the terms of the myriad organizational documents of individual Local Councils,as well as with the particular laws of jurisdictions throughout the United States.

 

An effort by a hypothetical chapter 7 trustee to rely on these reversionary interests to seize Local Council assets to satisfy claims against the Debtors would inevitably spawn fierce Local Council opposition and litigation, and face insurmountable obstacles, including:

•The contractual defense that attempted use of charter revocation or non-renewal to grab Local Council assets would constitute a lack of good faith and fair dealing.

•State franchise law that would bar a chapter 7 trustee of the Debtors from unilateral revocation or non-renewal of a Local Council charter to seize Local Council assets.

•The mandate under the terms of the very documents cited by the TCC that all obligations owed by a Local Council must be satisfied, or provision must be made for their satisfaction(including reserves for contingent claims against the Local Council), before any assets could even possibly revert to the Debtors.

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8 minutes ago, Eagle1993 said:

TCC will agree to the delay.  Flashing lights ... we may be close here...

It's my nature, but I don't have a great feeling after reading this.

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7 minutes ago, Eagle1993 said:

Flashing lights ... we may be close here...

Remember, attorneys hate the courtroom because of the unpredictability.  A continuance may only mean "We don't need you right now Judge."

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1 minute ago, MYCVAStory said:

Remember, attorneys hate the courtroom because of the unpredictability.  A continuance may only mean "We don't need you right now Judge."

That is true.  The delay could give TCC and others the ability to say they tried mediation to the fullest extent and it is time to allow other plans. 

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Posted (edited)

Note the parties to the mediation today

  1. the Debtors/BSA
  2. the Ad Hoc Committee of Local Councils
  3. the Tort Claimants’ Committee
  4. the Future Claimants’ Representative
  5. the Coalition
  6. the Insurance Companies
  7. and one of the Chartered Organizations.

ONE of the COs. There are only really two CO groupings that matter a hill of beans in this: LDS and the Methodists.

Here's the kicker: the Methodists are appearing as an Ad Hoc Committee, not as a "Chartered Organization" but as a grouping thereof.

Reading between the lines: the "Chartered Organization" was LDS.

And as for who "consented" to the delay

  1. Debtors/BSA
  2. Tort Claimants’ Committee
  3. the Coalition
  4. Ad Hoc Committee of Local Councils

Which is an interesting grouping in that it left out the FCR and the insurance companies. Put aside the FCR for a second (they may have just not been worked up enough to either support or actively oppose a 1 week delay), the fact that the insurers are not "consenting" could be a BSA/TCC/Coalition/LC deal. That looks an awful lot like a global deal that shoves the insurance company contributions to any settlement fund into future litigation.

Or I am reading way too much into this.

Edited by CynicalScouter
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