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Bankruptcy, everything but the legalese


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On 9/4/2021 at 10:05 AM, David CO said:

Totally disagree.  BSA is a business.  

People are always more cautious when dealing with businesses.  Buyer beware.  BSA's motives are not entirely pure and their product is not infallible.  Some degree of caution is advisable.

That's why I said "scouting"... and I agree with the latter part WRT BSA. 

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8 hours ago, fred8033 said:

QUESTION - I do have questions about victim's being able to sue COs.  I'll raise this in the main bankruptcy channel, but can victims sue the COs now?  Is the previous deadline gone?  Many of the victim's didn't know the CO or the troop number or the council.  So, the CO was probably often not named in the claim.  Even then, the claim was put to BSA.  Can the victim extend to other debtors?  ... I'm asking because the bankruptcy exists as a legal item, but I'm not sure the claim exists without an actual lawsuit.  Or can the bankruptcy claim be converted to a lawsuit claim? 

Things happen in the legal realm either by agreement or by compulsion. One leverages an agreement out of the opposition by presenting a strong case of compulsion.  

Only National has filed bankruptcy, so when it filed bankruptcy, it was the only "party" to the proceeding and thereby subject to the compulsion of the court.

Creditors (holders of business type, claims of a known amount), and Abuse Claimants (holders of claims of unknown amount) who receive notice can agree to become a party by filing a claim or can decide not to file a claim. Either way, they will be bound by the orders of the court.

Where Creditors and Abuse Claimants of National are legally postured if they are not notified until after critical dates pass (the claim date), escapes me a bit.  Assuming they have not received notice, if they are bound by the court anyway, it is a denial of the fundamental elements of due process and equal protection embodied in the Fifth and Fourteenth Amendments:  notice, and an opportunity to be heard.

National is attempting a sophisticated finesse.

The LC's and CO's are not parties to the bankruptcy and thereby neither bound by court rulings nor directly entitled to the protection of a bankruptcy discharge.

Except on account of National's finesse.

Clearly, if a good measure of LC's and CO's are pushed into bankruptcy the chaos will be extreme as it would involve thousands of entities.

So, National's finesse is using Nationa's assets, LC assets, CO assets, and insurer's assets to assemble a basket of funds so attractive to Abuse Claimants that they will AGREE to release the LC's and CO's from their abuse claims  even though those entities have not filed bankruptcy.

"Attractive" can mean any or all of:  an acceptable monetary award, sense that all responsible are paying something, avoidance of state court proceedings on a case-by-case basis, resolution now instead of years from now, etc. 

The LC's and CO's not being debtors should be liable to suit being filed against them despite National's bankruptcy.  When a petition in bankruptcy is filed it operates as a stay of legal proceedings against the debtor. The stay should have no bearing on the LC's and CO's which have not filed their own bankruptcy. 

Abuse claimants may be forbearing suit against LC's and CO's at the moment awaiting the outcome of National's bankruptcy.

 

 

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9 hours ago, fred8033 said:

QUESTION - I do have questions about victim's being able to sue COs.  I'll raise this in the main bankruptcy channel, but can victims sue the COs now?  Is the previous deadline gone?  Many of the victim's didn't know the CO or the troop number or the council.  So, the CO was probably often not named in the claim.  Even then, the claim was put to BSA.  Can the victim extend to other debtors?  ... I'm asking because the bankruptcy exists as a legal item, but I'm not sure the claim exists without an actual lawsuit.  Or can the bankruptcy claim be converted to a lawsuit claim?  

Yes, they can sue COs now in states where the statues of limitations were lifted and many have done so.

BUT they cannot advance the case. So, for example, in several instances (notably New York because the their statute of limitations open window closed recently) a victim filed their law suit and served the defendants. The defendants then immediately went to that state court and filed a copy of the bankruptcy court's Stay Order that pauses all state lawsuits against BSA until the bankruptcy is sorted out. It is basically just to be a placeholder lawsuit to ensure no one misses their last day to sue.

And yes, a claim can convert into a lawsuit BUT in states where there is a statute of limitations the suit would likely be almost immediately subject to a motion to dismiss (due to the statute of limitations). Then the claimant, now plaintiff in the lawsuit, would have to provide a reason and evidence why the statute of limitations did not apply. There are a very, very narrow set of circumstances where that would take place.

There's also a question of whether the stay applies to COs. I believe a consent order was entered to extend BSA's stay to the COs.

Edited by CynicalScouter
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On 9/3/2021 at 4:28 PM, CynicalScouter said:

The price tag I was quoted was that over the course of 3 years of local council service you had to contribute at LEAST the minimum $200 per year for Friends of Scouting AND sufficient funds to make West-Silver ($5000) in that 3 year time period. Basically, $150 a month for every month of board service.

For a Non-profit that intends to solicit funds, requiring some level of contribution from board members is reasonable and can be critical for the receiving of grants.  MANY of the grants available to non-profits of all shapes and sizes require (or at least weigh heavily) 100% financial participation by board members.  So even the smallish arts organization I'm a member of requires a minimum contribution of $100 per year. 

So, in the case you presented above, I didn't blink at the requirement for $200/yr for FoS, but another $5000 over the 3 year term is definitely going to be restrictive.

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3 minutes ago, elitts said:

So, in the case you presented above, I didn't blink at the requirement for $200/yr for FoS, but another $5000 over the 3 year term is definitely going to be restrictive.

FOS I understood. That's just a given. But this was just flat out "We want the money for the seat" and a specific benchmark West Silver which translated at $5000.

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6 minutes ago, CynicalScouter said:

The judge approved the RSA WITH TWO MAJOR AMENDMENTS:

  1. The Hartford settlement is still in.
  2. The Coalition is not getting paid ahead of everyone else.

For those two reason, BSA has never formally asked the judge to sign an order making the RSA (or what is left of it) go into effect. Lauria noted in the last hearing: the moment BSA does offer such a proposed order, Hartford can claim BSA is in breach of their agreement and file a claim for damages against BSA that takes precedence above everyone else.

So, the RSA isn't going anywhere.

So it really means a few different paths, correct?

1) Proceed with the current Hartford deal.  The TCC/Coalition said that is a non starter, so nope.

2) Renegotiate the Hartford deal.  I'm sure discussions are underway, so we will see.

3) Submit a plan with the Hartford deal that is rejected by claimants.  I believe that would then allow a 2nd plan to be submitted to claimants without the Hartford deal.  However, that will add months and months to the timeline.

4) Go with the BSA only plan ... but perhaps that would still be a breach of the BSA agreement, so this may be a no go.

So, unless I am wrong, it seems like the options are renegotiate or submit a plan that will be likely to fail.  Is there any other option?  

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44 minutes ago, Eagle1993 said:

CO's, if they want, could buy their way into the deal.  I expect the lawyers for the Coalition may be happy to leave them out as they can then sue them in state court. 

Well....the issue there is that many attorneys who deal with mass torts have retainer agreements that specify they will represent clients ONLY in the federal bankruptcy court, and not in State court (where it costs money to file a case).  The TCC has been begging claimants to ask their attorneys if cases have been filed in State court since that number in NY for example is far lower than the number of BSA claims.  So,  if an injunction goes away in a State that was open but now the window has closed there will be victims calling attorneys and being told "Sorry, our agreement said FEDERAL court only."   If anyone reads this and is asking themselves "I wonder if my State court case can or should or has been filed....CONTACT YOUR ATTORNEY if you have one!

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52 minutes ago, Eagle1993 said:

So, unless I am wrong, it seems like the options are renegotiate or submit a plan that will be likely to fail.  Is there any other option?  

There is the toggle plan which is a combination of 3) and 4). Plan 3.0.

Send out the global plan with BSA and LCs covered and maybe the COs and the Hartford deal (or new one valued maybe at $850 million).

It goes down in flames.

Then the judge bypasses a second vote and simply orders BSA only bankruptcy discharge. You could argue that’s a cram down. You can also argue it’s not a cram down since victims/claimants did NOT reject a BSA only plan, just the BSA/LC/CO plan.

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56 minutes ago, CynicalScouter said:

Then the judge bypasses a second vote and simply orders BSA only bankruptcy discharge. You could argue that’s a cram down. You can also argue it’s not a cram down since victims/claimants did NOT reject a BSA only plan, just the BSA/LC/CO plan.

Technically you could be right. But what then for BSA? She has to find the BSA only discharge leaves it with what financially to start over? No cash, the bases and a donor base spigot it could turn on. It could close LC’s or merge them and grab their assets. Then it could quickly file another Ch 11 to discharge any other liabilities it carries out of Ch 11 1.0. 
 

Not sure how it operates without chartering orgs. I’m sure they have a plan for that.

Or maybe the mountain of blunders, bad legal advice and rank incompetence make the situation not resolvable.

I’m just not seeing the path, just the Road to Perdition  

 

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1 hour ago, Muttsy said:

Technically you could be right. But what then for BSA? She has to find the BSA only discharge leaves it with what financially to start over? No cash, the bases and a donor base spigot it could turn on. It could close LC’s or merge them and grab their assets. Then it could quickly file another Ch 11 to discharge any other liabilities it carries out of Ch 11 1.0. 
 

Not sure how it operates without chartering orgs. I’m sure they have a plan for that.

Or maybe the mountain of blunders, bad legal advice and rank incompetence make the situation not resolvable.

I’m just not seeing the path, just the Road to Perdition  

 

My understanding from folks in the know at the BSA, the BSA must be able to submit a viable 5 year business plan to emerge from Chapter 11.  So if the LCs are not part of the settlement and will face lawsuits and be quickly forced into Chapter 11 or 7, will that not negatively affect the BSA business plan?  If major COs totally drop Scouting, units could have difficulties finding meeting places causing many to fold.  That would adversely affect the BSA emerging from Chapter 11.

Seems to me that the BSA needs to thread the needle and satisfy the claimants representatives, LCs, and COs.  Not certain that it is possible but not certain that the BSA cannot make a viable business plan without one of the pieces.

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2 hours ago, Muttsy said:

Not sure how it operates without chartering orgs. I’m sure they have a plan for that.

Or maybe the mountain of blunders, bad legal advice and rank incompetence make the situation not resolvable.

I’m just not seeing the path, just the Road to Perdition

Just about says it all, doesn't it?

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3 hours ago, Muttsy said:

I’m just not seeing the path, just the Road to Perdition  

I see many possible paths.  Even with all the problems of the last 20 years and the legal issues, scouting has intangible historic value that can easily continue.  The program will take a long time to shine again.  BUT, it can easily continue.

The issue of LCs, COs, where to meet, membership policies, etc ... is interesting, but it's all noise.  Scouting will continue.

For BSA, it's future is fully in whether it can get out of bankruptcy.  I see little value to anyone to keep BSA in bankruptcy and worse for everyone is a failed bankruptcy.  I see the best for all the victims is moving past the BSA bankruptcy and directly to claims against the insurance companies.  I see BSA's bankruptcy slowing that down.  

Perhaps, it's me.  I'm always hopeful.

 

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Just a friendly reminder, but we split the ch 11 thread such that topics including tcc and bankruptcy plans would stay in the old one and all the other topics that came up about yp, moral vs legal, the future of scouting, etc, would go here.

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5 minutes ago, MattR said:

Just a friendly reminder, but we split the ch 11 thread such that topics including tcc and bankruptcy plans would stay in the old one and all the other topics that came up about yp, moral vs legal, the future of scouting, etc, would go here.

Sorry too late for me to delete my post in this thread 

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