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Chapter 11 Announced - Part 5 - RSA Ruling


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14 minutes ago, CynicalScouter said:

After all the kicking and screaming that the TCC and Coalition did about how unfair the Hartford deal was, it would seem they HAVE to walk away from the RSA, invoke that provision above, and go into the disclosure phase opposing the BSA.

From my understanding of the options now..

1) Hartford deal is in the plan.  Now, it could be rejected and that would meet the Hartford deal.  ... But it must be in the plan.

2) Hartford deal is fought in court in an adversarial hearing.  Evidence would be presented and the judge would be asked for a ruling on the deal.

3) Hartford agrees to a new plan.

What does 1, 2 & 3 mean ... DELAYS!  BSA will probably need to determine the path that gets them to the quickest resolution.  I expect #3 is out ... so my bet is #2 as I'd have a hard time seeing TCC not object to #1.

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13 minutes ago, ThenNow said:

To add my color commentary, that is the first and only moment in all the appearances that I saw Jessica Lauria rattled. She took in a huge breath and you could see her pulse. 

Pure conjecture: she may have been so focused on the ruling today that she forgot about August 25 and that now that hearing is likely just gone.

FYI: Reuters is touting today as an "approval" but I think it is a lot more nuanced than that.

U.S. bankruptcy judge approves Boy Scouts sex abuse settlement

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Just now, Eagle1993 said:

DELAYS!  BSA will probably need to determine the path that gets them to the quickest resolution. 

BSA's cash/fiscal projections slide that was NOT heavily redacted showed several contingencies, including "March 2022" exit from bankruptcy. That looks about right.

It also means a) rechartering and recruitment under a cloud and b) Methodists NOT having any kind of resolution by their December 31, 2021 "no recharter past this date" deadline.

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7 minutes ago, ThenNow said:

As a “law firm” of one retired attorney and one freeloading client, I am glad the Coalition deal was ditched on principal. As to it’s impact on this process, I have to assess my thoughts and feelings. Let’s see how they react. Regarding the Hartford deal, if I get a $1 vote and it remains part of the deal, I can’t in good conscience vote for such a plan. However, I will wait for words from the TCC and, maybe, the Coalition to further inform me.

She went HARD after those fees.  I see no chance they are ever approved.  

What does this mean?  The Coalition will not get the $10M + $900K/month ... likely $15-$18M of fees lost.  If they were counting on those, they will need BSA to kick in another $30 - $40M in the settlement.  

If this was the only issue, then I think there was a chance the Disclosure hearing could be maintained.  However, the Hartford deal will give the Coalition cover to abandon the current RSA without looking like they did it because of the fees.

My guess ... RSA is DOA and a negotiations will pick up again.  

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11 minutes ago, CynicalScouter said:

FYI: Reuters is touting today as an "approval" but I think it is a lot more nuanced than that.

Oh, my yes. Maria Chutchian is typically more precise. She wanted to be first to “print.”

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I think this news report by the AP  is more accurate; emphasis on "conditional"

Boy Scouts get conditional approval of $850M bankruptcy deal
 

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It was not immediately clear how the judge’s ruling will affect the future of the bankruptcy case, given that she rejected two significant provisions in the agreement.

While ruling that BSA officials exercised proper business judgment as required under the law in entering into the agreement, the judge refused to grant a request that the Boy Scouts be allowed to pay millions of dollars in legal fees and expenses of attorneys hired by law firms that represent tens of thousands of abuse claimants.

She also denied the BSA’s request under the agreement for permission to withdraw from an April agreement in which insurance company The Hartford would pay $650 million into the fund for abuse claimants in exchange for being released from any further liability.

 

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Just now, CynicalScouter said:

I think this news report by the AP  is more accurate; emphasis on "conditional"

Boy Scouts get conditional approval of $850M bankruptcy deal
 

 

My twitter feed is filling up with articles.  They range from:

  • Judge approves $850M deal
  • Just partially approves $850M deal
  • Boy Scouts get conditional approval
  • Boy Scouts get approval but judge rejected two key provisions

 

 

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So, placeholder here, but things I would expect to see soon:

  1. Judge's decision on the docket; she indicated she would get it there. I would expect it Friday, not shocked if it is posted Thursday night.
  2. Monday a motion or notification from the court that on request of the BSA the August 25 hearing is postponed to a date TBD.

Things I would expect to see in the medium term:

  1. The insurers now have Kosnoff, on record, saying some of the claims used his name without his permission (which tap dances close to forgery) PLUS their own handwriting and other experts saying at least some claims have similar issues. Don't think they are letting up on that. They'll start asking for discovery again (and again and again) etc.

 

 

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11 minutes ago, Eagle1993 said:

I also don't  agree that this means Ch 7 is coming.

It has been his wish-becomes-the-reality desire since the start. I don't see a Chapter 7. Moreover, I could see a toggle plan, but with all the LCs having committed to paying, I don't see BSA just dropping/abandoning them at this point.

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Boy Scouts Deal With Abuse Victims Gets Bankruptcy Approval
 

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But the judge said she wouldn’t approve certain aspects of the agreement, such as nullifying an earlier $650 million settlement between the Boy Scouts and insurer Hartford Financial Services Group Inc. The youth group’s obligations, if any, to Hartford must be decided separately, she said.

Nor will she let the Boy Scouts cover millions of dollars in legal fees for lawyers that negotiated in the bankruptcy on behalf of abuse victims, she said.

It is up to the Boy Scouts and the abuse survivors whether to file a chapter 11 plan consistent with her ruling, she said. The restructuring agreement is designed to lock in support for the bankruptcy plan from the bulk of the 82,500 men who stepped forward to seek compensation after the youth group filed for bankruptcy last year.

 

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One point that I think we should consider. The judge wasn’t sympathetic to the CO objections nor the insurance companies that said the BSA needs COs to function. She basically said it isn’t her job to decide what is best for BSA’s business and she will defer to theBSA.

So… I expect she would approve a deal with no CO protection  

 

 

 

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