Jump to content

Chapter 11 Announced - Part 4 Revised Plan


Recommended Posts

4 minutes ago, SiouxRanger said:

So, as I understand this, the settlement will compensate the "Unique and Timely" abuse claims even though not legally enforceable?

Yes, up to a point.

Depending on what state you are in the payment may be as low as 1% or as high as 75%

Link to post
Share on other sites
  • Replies 1.6k
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Popular Posts

@CynicalScouter Thanks from me and frankly, surely everyone, for tracking on the status of National's bankruptcy pleadings, and the procedural steps, past and pending, in the Bankruptcy case. And your

Okay. Enough. If you aren't talking about court proceedings then drop it.  It would be a shame to lock this thread now.

A few random observations from watching this bankruptcy unfold over the past several months: The focus has clearly been on protecting the national organization first and then the local councils.

Posted Images

1 hour ago, CynicalScouter said:

Point of reference. Blackhawk Area Council last week announced the sale of Camp Canyon to pay for the settlement. After 750+ emails, the council backed down and announced a new plan to pay for the settlement without having to sell properties is coming.

I speculated that the alternative plan (to be announced August 2) will be for the council to use its cash instead of property.

Canyon Camp was, according to BSA's numbers, valued at $1,668,940.

Blackhawk Area Council balance sheet (again, BSA numbers) indicated

Cash & Equivalent = $310,974
Land, Buildings, and Equipment (including Camp Canyon) = $1,832,040 (land value - depreciation)
Long-Term Investments = $3,989,290
Other Assets = $5,881,177

  • All Unique & Timely Abuse Claims = 151 (plus some shared with other councils)
  • All Not-Barred, Unique & Timely Abuse Claims = 15

So, while they haven't announced the number, working backwards it looks like they were going to pay $1,668,940 on 151 claims, or roughly $11,000 per.

Illinois is a "Gray 1" state, meaning under the BSA/TCC/Coalition plan claims would be valued at 50%-70%. Blackhawk also includes part of Wisconsin which is Gray 3 (10-25%). I don't know how those 151 or 15 claims breakdown.

 

So, if a camp is sacrificed, and cash retained, for what purpose is that cash retained?  To buy another camp, perhaps smaller and less expensive to maintain?  To pay staff salaries?  (Isn't that largely what it is for anyway?) In years past, in my council, all of the United Way monies, popcorn sale profit, and Friends of Scouting contributions were not enough to cover payroll.  That is, all of the major sources of revenue were not enough.  Part of the fees scouts paid to attend events also were used to pay salaries. Appallingly top heavy, in my estimation.

How much of a "sell the camp" decision is driven by a "preserve management prerogatives" motive?

Link to post
Share on other sites
3 minutes ago, CynicalScouter said:

Yes, up to a point.

Depending on what state you are in the payment may be as low as 1% or as high as 75%

So, from 1% to 75% of non-legally enforceable claims are on tap to be compensated.

What is the basis of the  "Gray" system of classifying states (and thereby the claims arising in that state)?

Link to post
Share on other sites
10 minutes ago, SiouxRanger said:

So, if a camp is sacrificed, and cash retained, for what purpose is that cash retained?  To buy another camp, perhaps smaller and less expensive to maintain?  To pay staff salaries?  (Isn't that largely what it is for anyway?)

Depending on the council this is going to mean dipping into their endowments and long term investments. It is it NOT just cash sitting in a checking account for operational expenses.

That means the x% interest the council gets each year is going to be lesser in the long run. That is why not for profits are NOT inclined to dip Into endowments unless they absolutely have to.

Edited by CynicalScouter
Link to post
Share on other sites
5 minutes ago, SiouxRanger said:

So, from 1% to 75% of non-legally enforceable claims are on tap to be compensated.

What is the basis of the  "Gray" system of classifying states (and thereby the claims arising in that state)?

The TCC lawyers said placement of states in Gray 1, 2,  3 vs. Closed was their professional expertise/opinion and that of other lawyers as to how likely a claim would fare in that state’s court system based in existing SoLs and their opinions in odds of success.

Edited by CynicalScouter
Link to post
Share on other sites
12 minutes ago, CynicalScouter said:

Depending on the council this is going to mean dipping into their endowments and long term investments. It is it NOT just cash sitting in a checking account for operational expenses.

That means the x% interest the council gets each year is going to be lesser in the long run. That is why not for profits are NOT inclined to dip Into endowments unless they absolutely have to.

To my way of thinking, "long-term investments" is an artificial designation or determination by the owner of those funds, essentially meaning, "We don't want to spend those but to rely on the interest generated by them." But the owner retains control of the funds.  In a bankruptcy, by a council, any funds the council has signature authority over is an assets of the bankruptcy estate.

"Endowment funds," to my way of thinking, are funds donated by third parties, and subject to some measure of restrictions on use.  A council is not likely to have signature authority over the principal, but only the interest generated. Even the interest may be subject to restrictions.

In my experience, my council prefers donations to be made to the general fund and not subject to any restrictions.  Why the donor of a significant donation would do that is beyond me.  Far more protective of the donor's gift is a separate entity that is not controlled by the council, which disburses funds as determined by that separate entity to the Council to fulfill the donor's intent.

This gets me to the issue of the proper role of a not for profit.  Is its goal to amass a war chest and, hopefully, remain forever untouched?  I understand the need for a rainy day fund, but to what degree? At some point, when a sufficient war chest is amassed, the not for profit should get back into the business of improving its program offerings. (I was particularly struck by the net worth attributed to my council in the bankruptcy filings-millions more than ever appeared possible, camp being a mere fraction of the total, yet camp is always scrapping for minuscule amounts (less than $1,000) to replenish dog-eared camp expendables.  Why would this be?

The issue is partly one of matching a donation to a likely intended beneficiary.  When grandpa donates $50 to Friends of Scouting he is expecting those funds to have some effect which his grandchild will see.  At council level, the attitude seems to be that all donations benefit the scouts, as they benefit "Scouting."  Even if the entire donation is consumed by salaries, or goes into a long-term investment.

If councils were truly seeking to benefit youth by providing program, donations would be used to provide those programs to more youth. But I don't see that happening.  After some years on the council executive board, I do not recall one second's discussion of budget issues-how much to spend on program as opposed to salaries, or long-term investments. Those issues disappear into a black hole.

Link to post
Share on other sites
11 minutes ago, SiouxRanger said:

To my way of thinking, "long-term investments" is an artificial designation or determination by the owner of those funds,

It's not. It has specific legal meanings for tax and financial purposes under federal and state law.

  • Upvote 1
Link to post
Share on other sites
23 minutes ago, SiouxRanger said:

If councils were truly seeking to benefit youth by providing program, donations would be used to provide those programs to more youth. But I don't see that happening.  After some years on the council executive board, I do not recall one second's discussion of budget issues-how much to spend on program as opposed to salaries, or long-term investments. Those issues disappear into a black hole.

Has anyone done a thorough review of the LCs (or BSA overall) on the various NGO/NPO watchdog sites to see how they rate? I just did a very quick look on Charity Navigator, picking LCs by random. There is a common denominator: lower ratings on "Accountability and Transparency." Each one was marked down for a lack of available Donor Privacy Policy, Audited Financials and Form 990s. I don't know about any of this, since I didn't bother to dig further. The same could be done on Charity Watch, Guide Star and BBB Wise Giving Alliance. All that aside, I've heard many here grouse about the very issue of juicy cuts and wine on the table and crumbs and scraps for foot soldiers and their critical field kits. 

Link to post
Share on other sites
1 hour ago, SiouxRanger said:

If councils were truly seeking to benefit youth by providing program, donations would be used to provide those programs to more youth. But I don't see that happening.  After some years on the council executive board, I do not recall one second's discussion of budget issues-how much to spend on program as opposed to salaries, or long-term investments. Those issues disappear into a black hole.

This makes me wonder how Friends of Scouting ever became part of scouting to the degree where it is utilized to fund salaries rather than specific needs.  Many Friends Of type organizations often specify that their donations not be used for such. I've been on several boards -- for example, an Educational Foundation that supports a school district and a Friends Of board that supports a preserve. In both situations, requests had to be made to the board which weighed whether to fund the request. It was never for salaries, it was for program enhancements, perhaps urgent repairs, a new piece of equipment, etc. It never dawned on me how differently FOS works in scouting. It's also disconcerting how it is an aggressive 5th hand out for more money from almost the same pool of payees, the other four "hands" being National fees, Council fees, Uniform, Unit fees, and then FOS. 

Link to post
Share on other sites
56 minutes ago, ThenNow said:

All that aside, I've heard many here grouse about the very issue of juicy cuts and wine on the table and crumbs and scraps for foot soldiers and their critical field kits. 

 

4 minutes ago, yknot said:

This makes me wonder how Friends of Scouting ever became part of scouting to the degree where it is utilized to fund salaries rather than specific needs. 

Legitimate "grousing" confirmed. 

Author's Note: The use of a term that also refers to a bird that flies loudly into your face when you flush it and subsequently make a feeble effort to get a bead on it is intended to be taken in the best possible way. It does not imply whining, rather intelligent objections based on analysis and personal experience. ;) 

Link to post
Share on other sites

Kosnoff is highlighting some major, new, concerns today:

  • The TDP awards will be non binding
  • The insurance assignments re non-Debtor policies (LCs) might void those policies 
  • The insurance assignments re non-Debtor policies might cap the exposure.

He is stating that since LCs are only contributing $600M, technically, the combined insurance exposure (based on how the policies are written) will max out the insurance liability to $600M.

Moulton (from the Coalition?) apparently has acknowledge the concerns and now claims there is a "kill switch" that will kill the deal if those risks materialize.

Kosnoff is stating there is no kill switch if the RSA is accepted. 

Any idea where this info is coming from?  Who is Moulton?  Was there an interview recently?  Is there really a "kill switch" that would dump LCs out of this plan?

 

-- Looks like he means David Molton, attorney for the Coalition.  

Edited by Eagle1993
Update on David Molton
Link to post
Share on other sites
1 hour ago, Eagle1993 said:

Moulton (from the Coalition?) apparently has acknowledge the concerns and now claims there is a "kill switch" that will kill the deal if those risks materialize.

Kosnoff is stating there is no kill switch if the RSA is accepted. 

This is the Kosnoff claim thread

 

The RSA lists 10 specific reasons why the RSA may be terminated by the Coalition, TCC, and Future Claimants’ Representative. Page 51-53. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/1d5f346b-47b8-43d3-b4cf-4a0393aa8256_5466.pdf

None seem relevant and none have anything to do with the TDP awards being "non-binding", the $600 million being a cap on insurance claims (this I believe came up in the Status Conference call last week), or any of this.

There is an 11th reason the RSA terminates: run out the clock. The RSA by its terms ends

  1. July 28, 2021 (if RSA is not approved by the court by then) or
  2. May 31, 2022 (if the RSA is approved)

All sides can agree to extend those deadlines. So, I guess the kill switch would be to somehow stall out proceedings until the RSA deadline hits and then the TCC and Coalition refuse to an extension.

As I said previously: there are still tons of ways this whole thing blows up in everyone's faces and the $850 million deal completely falls apart.

And remember that 2/3rds rule. Someone like Kosnoff may not have enough clients to approve a plan, but he might just have enough he can persuade to scuttle any plan.

  • Thanks 1
Link to post
Share on other sites

Kosnoff expanded ... there is precedent that he is siting in Fuller-Austin case.  Honestly ... it reads almost identical to the BSA case.  Fuller-Austin went through bankruptcy due to asbestos claims.  While they had an agreement with claimants, they did not involve their insurance companies.  The plan created a settlement trust.  Fuller-Austin received a full release after contributing to the trust.  In addition to cash they provided they contributed their insurance policies. .... sound familiar?

The plan created a CRP (claims resolution procedure).  There is a bunch of details on who gets access to claims and how periodical sums would be paid. Hmmm... 

There is a ton of detail on insurance companies objecting to the plan and the judge ruled they didn't have standing.  (This hasn't happened yet).

It goes on, and on.  One point ... the appeals court, which ruled in favor of the insurance companies ... was 7 years after the bankruptcy plan was approved. 

https://www.businessinsurance.com/article/20060122/story/100018223/asbestos-trust-cant-force-settlement-on-insurers

Now ... eventually the trust must have received some insurance funding ... but, get this ... it is still active.  The trust was generated in 1999 and it is still active.  Over the last 20 years it has paid out, on overage, $8.5K per person to about 34,000 claims.  You can still file claims.

The insurance companies fought hard with the asbestos case ... from what I can see, 7+ years post plan approval.  So ... its likely the only money in the plan for the foreseeable future is the National/LC settlement.

I wonder how these prior cases compare to BSA and impact insurance liabilities.  Hopefully the lawyers are reviewing and advising their clients.

Finally ... Kosnoff confirmed on Twitter there are only 2 ways the deal can be rejected (there is no other kill switch).

  • The judge can still reject it
  • If the judge approves, the claimants can vote against it, preventing the 2/3 approval
Link to post
Share on other sites
1 hour ago, Eagle1993 said:

Now ... eventually the trust must have received some insurance funding ... but, get this ... it is still active.  The trust was generated in 1999 and it is still active.  Over the last 20 years it has paid out, on overage, $8.5K per person to about 34,000 claims.  You can still file claims.

Right. The asbestos (and Agent Orange) claims are famous/infamous for being forever because of people discovering illness due to exposure decades later and because of the litigation involved and because there were multiple companies.

The BSA bankruptcy may be as bad not because of BSA (they'll either get out of this or be dead from a lack of money in short order) but because of trying to also add-on the LCs, the COs (now dropped of course and utterly, utterly furious), and of course the insurance companies.

Edited by CynicalScouter
  • Upvote 1
Link to post
Share on other sites
29 minutes ago, CynicalScouter said:

Right. The asbestos (and Agent Orange) claims are famous/infamous for being forever because of people discovering illness due to exposure decades later and because of the litigation involved and because there were multiple companies.

The BSA bankruptcy may be as bad not because of BSA (they'll either get out of this or be dead from a lack of money in short order) but because of trying to also add-on the LCs, the COs (now dropped of course and utterly, utterly furious), and of course the insurance companies.

There is also the future claimants group.  People who didn’t sue, perhaps too young or other reasons.  But it is a good point that a much higher percentage of claimants have filed in the BSA case up front than those other examples.  

Link to post
Share on other sites
Guest
This topic is now closed to further replies.
×
×
  • Create New...