Chapter 11 Announced - Part 6 - Plan 5.0/TCC Plan TBD

[Eagle1993]

8 minutes ago, MattR said:

But in most cases, other than this one, the legal fees are small potatoes compared to the value of the company. The example in the article was that for Enron it was 2% and for the BSA it's already 40%. 2% wouldn't have much impact on what survivors get.

I'd like to see that 40% split out by the various groups of lawyers. I have a hunch the BSA was sold a bill of goods by its own lawyers. Their plan has been to drag this out while trying shady deals with whomever told them what they wanted to hear. That doesn't seem to be working very well for anyone but the lawyers.

There is a lot of failure here and many to blame.  Harvard Law Review will have a very expensive case study.  

The more I look at this, it is hard not to ultimately blame the judge.  She has the overall power of this case.  She could have demanded details on why only 2 of 3 mediators were signing reports.  She could have prevented this from being a mass tort trolling exercise.  She could have made rulings early on in terms of fee structures.  She let this go on too long with a hope that mediation would get the two sides there.

If this plan is voted down, she cannot simply say return to mediation.  She needs to indicate which side needs to move and start ruling.  I think she has done a good job over the last week ... but its time for wins/losses to quickly pile up.  Take charge by appointing new leadership of the BSA (or threaten it).  Throw out the Hartford deal as it failed.  Throw out the LDS deal.  COs are out (they had a long time and only 1 came up with an offer).  LCs ... give 1 more chance, if TCC doesn't agree quickly with the offer, they are out.  

I tried to blame various parties, but honestly, every group is fighting for their own team.  If the ref doesn't throw a flag, what do you expect?

[fred8033]

1 hour ago, ThenNow said:

Mysterious, right? And that is no shadow of darkness on any claimant committee’s counsel. This where the web is tightly woven. So, across the spectrum of legal counsel in this case (not including in-house and out-house counsel for the insurers), including those billing the Debtors’ estate, we have at a minimum:

1) Contingent fee state court plaintiff’s counsel who headed the charge in open and window states pre-filing;

2) Debtor’s bankruptcy counsel, and there are several iterations - billed to the estate, at a max hourly of $1700 per;

3) PSZJ, lead counsel for the TCC - billed to the estate with 10% to the Settlement Trust;

4) Pasich, TCC insurance counsel - billed to the estate;

5) All the contingent fee claimant’s counsel that came post-filing;

6) Coalition and AIS counsel - I lost track of how many layers - and, as noted, the Coalition wants their attorneys’ fees paid by the estate. Yes. The contingent fee attorneys have attorneys who also have attorneys and the groups they formed have attorneys or something like that. Seriously, I want a flow chart. When this became apparent to me, I knew (for sure) the wheels had come off and/or I have multiple screws loose. Probably all of the above.

I have not included all of the other asset assessment, accounting and analysis firms billing the estate. Also, in case I wasn’t clear, multiple of the AIS and Coalition attorneys have their own counsel who have been and will be pretty busy for a spell.  I’m sure I missed things, but I can’t think about this any more...

When you write "billed to the estate" ... that being the estate of BSA (old, pre-bankruptcy).  

QUESTION - Is that money flowing out right now?  Or pending settlement? 

I ask as if it's being billed and paid now, what is the closure incentive ?  Closure would mean a dried up revenue stream.  ...  If as I suspect, the BSA estate value is being diminished at a rate of $10m+ a month to handle the legal fees against a $200m/$300m settlement from BSA.  

It reminds me of the divorce of a friend of mine.  He and his ex-wife spent well over $600k on the divorce legal process as it was not a nice divorce.  His comment was that there was no incentive for the courts, the lawyers or his wife to work it efficiently.  ... His wife was a lawyer too.  

[ThenNow]

3 minutes ago, fred8033 said:

QUESTION - Is that money flowing out right now?  Or pending settlement? 

I think the docket entries are on the 20th monthly billing cycle from the professionals who submit their invoices for approval.  So, yes, the dollars are going out. I’m sure someone else has a handle on this. I just tried to get on the Omni site and the little construction worker is still shoveling money out of the virtual street. I think it’s cleanup after the most recent bags of money were hauled out of the vault. 

[fred8033]

MattR wrote:  .... Enron it was 2% and for the BSA it's already 40%. 2% wouldn't have much impact on what survivors get.

21 minutes ago, Eagle1993 said:

There is a lot of failure here and many to blame.  Harvard Law Review will have a very expensive case study.  

Numbers need context.   

2% of Enron's 63.4B bankruptcy is $1.3 billion in legal cost.   

BSA's case is probably as hard if not harder due to the ugliness of CSA and the many competing factors and other plaintiffs.  Also, it's hard to find BSA's value alone, but it's way smaller than Enron. 

Edited December 10, 2021 by fred8033

[fred8033]

6 minutes ago, ThenNow said:

I think the docket entries are on the 20th monthly billing cycle from the professionals who submit their invoices for approval.  So, yes, the dollars are going out. I’m sure someone else has a handle on this. I just tried to get on the Omni site and the little construction worker is still shoveling money out of the virtual street. I think it’s cleanup after the most recent bags of money were hauled out of the vault. 

I'd love to see the bill versus payment.  A lawyer friend of mine made the comment that he's sure the court was not necessarily paying 100% of the legal bills.  Courts can reduce fees as they see fit.  ... I'm not seeing that in this case.

If you have a link to it that I can see, I'd appreciate it.

[ThenNow]

1 minute ago, fred8033 said:

I'd love to see the bill versus payment.  A lawyer friend of mine made the comment that he's sure the court was not necessarily paying 100% of the legal bills.  Courts can reduce fees as they see fit.  ... I'm not seeing that in this case.

If you have a link to it that I can see, I'd appreciate it.

I can’t get to the OmniAgent docket at the moment. Take it up with the little money-shoveling man, er, person.

[johnsch322]

Omni is back online.

[Eagle1993]

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/6a26d2ed-e290-408d-a893-57cc7e1a0d44_7680.pdf

AVA is objecting to TCC's request to require AIS (AVA, KR & Kosnoff) to send a joint letter to all claimants.  AVA states they are neither in favor or against the plan.  They believe the plan is appropriate for some of their claimants.  They also believe others should reject the plan.  They indicate they have been advsising each claimant based on their individual situation.

Note that many AVA claimants are stating they can't even get in touch with AVA.

They make a pretty good argument in this document.  I would say if the issue was just KR vs Kosnoff, then TCC is probably on firmer ground.  

[ThenNow]

1 hour ago, Eagle1993 said:

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/6a26d2ed-e290-408d-a893-57cc7e1a0d44_7680.pdf

By far my favorite excerpt from any pleading in a very long time. It can be found at page 3, paragraph 4 and footnote 3. I can’t make this stuff up, but man I love my job as a beat writer. (Not beat poet, for the record, though I can do that, as well. Soul patch is long gone, but I chase rabbits.) Check this out and be prepared to laugh: 

“If clients request an e-ballot, AVA refers them to Einseberg Rothschild.”

(If only I could vote a laugh on my own post. Would someone see to that, please?)

Edited December 11, 2021 by ThenNow

[Eagle1993]

There is a hearing scheduled tomorrow.  One topic is PONIL RANCH, L.P. vs BSA.  Ponil filed a lawsuit against BSA October 19 about an easement they have through Philmont ranch.  It is not clear to me what happened that cause Ponil to file the lawsuit ... unless they just want to ensure their easement through Philmont is maintained during/post bankruptcy.

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/c8dd3fa5-6704-49f7-ba60-59ecf6cd1591_1.pdf

[ThenNow]

3 hours ago, Eagle1993 said:

It is not clear to me what happened that cause Ponil to file the lawsuit ... unless they just want to ensure their easement through Philmont is maintained during/post bankruptcy.

I’m horribly rusty, but I played a land use attorney on TV in a former life and that would be my bet. With all the talk of asset sales, reversionary interests, and etc., I would've advised putting a stake in the ground and sounding out the situation before it happened to land on a client’s head. I wonder when it was granted, if for consideration (one time or ongoing) and if the grant of easement itself contains certain terms of termination.

Edited December 13, 2021 by ThenNow

[vol_scouter]

Just heard on the news that an insurance company who was not named is contributing $800 M to bring the total to $2.6 B.  Anyone have more information?

[Eagle1993]

Rumors that local councils have increased their offer by $40M and Century settlement is in at $800M.

https://www.cbsnews.com/news/boy-scouts-america-bankruptcy-sex-abuse-settlement/

Edited December 13, 2021 by Eagle1993
Updated LC comment

[RememberSchiff]

“This is an extremely important step forward in the BSA’s efforts to equitably compensate survivors, and our hope is that this will lead to further settlement agreements from other parties,” the Boy Scouts said in a prepared statement. “In addition to our continued negotiations with other insurers, the BSA has worked diligently to create a structure that will allow the Roman Catholic-affiliated churches and United Methodist-affiliated churches who sponsored Scouting units to contribute to the proposed settlement trust to compensate survivors.”

Attorneys with an ad hoc group called the Coalition of Abused Scouts for Justice, which represents about 18,000 abuse claimants, said in a news release that the Century settlement is another reason for claimants to vote for the BSA’s reorganization plan.

“Not only is the coalition creating the biggest possible compensation fund for survivors — it’s the only fund on the table, and it vanishes with a ‘no’ vote,” said attorney and coalition co-founder Anne Andrews. “The coalition also continues to work with the Boy Scouts of America on accountability and safety measures to ensure that no child will have to endure the horrific harm and abuse our clients have suffered.”

More at sources:

https://www.wkyt.com/2021/12/13/insurer-agrees-800m-settlement-boy-scouts-bankruptcy/

https://www.prnewswire.com/news-releases/coalition-of-abused-scouts-for-justice-increases-largest-sexual-abuse-settlement-fund-in-history-to-more-than-2-6-billion-301443521.html

"The next virtual meeting will take place Tuesday, December 14, 2021, at 8:00 PM ET/5:00 PM PT. For information on the benefits of the plan, instructions on how to vote, or access to the next virtual meeting, visit scoutingabusesurvivors.com. "

 

Edited December 14, 2021 by RememberSchiff
virtual meeting

[MYCVAStory]

Some important context on this insurance contribution from an attorney opposing the plan:

Like the proposed Hartford deal, this is an absolute windfall for Century and for the third parties who would likely get a release of liability for paying $0 out of their own pockets or from their separate insurers. 

Century insured the most claims in this bankruptcy -- about 40,000 claims.  With this settlement, the two insurers who wrote the most coverage, Hartford and Century, have now settled out.  If you do the math, this works out to an average of about $20,000 per survivor who had a claim covered by Century, and less than an average of $10,000 per survivor if spread across all survivors who filed a claim in the bankruptcy. 

This means the global settlement fund will now be around $2.4 billion.  If you look at the disclosure statement, the TCC provided estimated how much the average survivor would receive based on a global fund of around $1.6 billion.  For ease of math, you can increase those estimates by about 50%. 

If you were fondled under the clothes, you are estimated to get an average of between about $1,200 and $22,000.  If you were masturbated, you are estimated to get an average of between about $2,400 and $44,000.  If you suffered the worst type of abuse possible, you are estimated to get an average of between about $5,000 and $87,000. 

As noted above, the fine print of these proposed insurance deals is that survivors have to release their claims against any of the insureds of these participating insurers.  We have not yet seen all the fine print on this new proposal, but our guess is that it will require most claims against most charter orgs to be released for $0.  If you have a claim against a wealthy charter, the Hartford and Century deals likely means that claim is released for $0 from that charter.