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

[T2Eagle 902]

5 hours ago, johnsch322 said:

The biggest increase will come from the insurance companies when the current plan is rejected. I think the LC’s will have to double the amount committed and it won’t be tied to membership increases payable in 2035 (that part is pretty insulting). 

The big black hole of this case has always been the insurance company liability.  Over the years the insurers have covered, or alleged to have covered BSA, the LCs, and the COs.

Given all the discovery that has occurred, I'm surprised there is so little solid information about what their actual liability may be.  I suspect that the answer is no one knows.  Decades old policies, subject to all sorts of interpretations.  At the end of the day, no side will want to risk the full litigation of this, because no side will risk losing it all.  So eventually there has to be a deal, a deal, not an imposed outcome.

[Eagle94-A1 2687]

I do have a few questions regarding a BSA only Chapter 11, in order of importance.

1. Since part of the charter fee every CO paid to national to have a unit over the years was for insurance, how will COs go about submitting claims if they are sued in a post BSA only Chapter 11? I know many UMC orgs submitted holding claims, but what about the others?  Will this come out of the Future Claimants Fund? Will Insurance companies have to pay out additional funds? Or will the charter orgs be out of luck and completely thrown under the bus by  BSA?

2. Since part of the charter fee local council's paid to national to have a council  charter was for insurance, How will councils go about submitting claims if they are sued in a post BSA only Chapter 11? If Council did not submit holding claims like the UMC did, are they out of luck?

I think those two questions are part of why this is an absolute mess. COs have been told since before I became a Cub they were  protected. Now it seems as if National is throwing them under the bus. Ditto with councils.

[Eagle1993 2161]

1 hour ago, Eagle94-A1 said:

I do have a few questions regarding a BSA only Chapter 11, in order of importance.

1. Since part of the charter fee every CO paid to national to have a unit over the years was for insurance, how will COs go about submitting claims if they are sued in a post BSA only Chapter 11? I know many UMC orgs submitted holding claims, but what about the others?  Will this come out of the Future Claimants Fund? Will Insurance companies have to pay out additional funds? Or will the charter orgs be out of luck and completely thrown under the bus by  BSA?

2. Since part of the charter fee local council's paid to national to have a council  charter was for insurance, How will councils go about submitting claims if they are sued in a post BSA only Chapter 11? If Council did not submit holding claims like the UMC did, are they out of luck?

I think those two questions are part of why this is an absolute mess. COs have been told since before I became a Cub they were  protected. Now it seems as if National is throwing them under the bus. Ditto with councils.

I expect both would be decided by state courts.   First, the CO would likely ask for the case to be dismissed saying they were not liable as they followed BSA policies.  If that didn’t work, then I expect the CO would then sue the BSA insurance company if they were not helping/providing coverage.  I’ve seen many examples where churches/etc sued insurance companies for not covering them in CSA.  
 

These are just a couple of guesses but I agree the issue is complex.  

[ThenNow 1373]

11 hours ago, T2Eagle said:

Given all the discovery that has occurred, I'm surprised there is so little solid information about what their actual liability may be.  I suspect that the answer is no one knows.  Decades old policies, subject to all sorts of interpretations

There are a lot of things jumbled up in these sentences. I am completely unqualified to unpack them, but that never stopped me before. There are at least three different things going on here:

1) Coverage Exposure. Yes, the polices are myriad, but they have been reviewed and the coverage exposure assessed, or so I’m told. That number is in the hundred + $B range. That is about the amount of “cover” purchased through all the policies over all the years. (My recollection is there is a 40 or so page list of the policies involved here.) Coverage “exposure” is not “liability.” Exposure is the max number you could be hit with in the worst case scenario of determined liability. (See, #3.);

2) Estimation of Value. The TCC sought an “estimation” of the value of claims many months ago. That was a midstream effort to peg only that element - value of the claims - but it would have put a stake in the ground around which to negotiate settlements. Insurers fought that and won. In their minds, an estimation would smell too much like a determination of liability. (See, #3.). The TCC was looking to get all the data on past BSA child sexual abuse settlements to factor into that estimation, along with all the other independently available data on how much the cases are “worth.” However, neither “worth” nor “value” are liability either; and

3) Financial Liability. Actual “liability” - in this context, what someone owes - is determined by a process that produces a dollar figure, be it settlement, judgement or award. (There could be non-monetary elements, but forget about that for the purpose of this ramble.) That said, in almost all settlements the “liable” party denies liability, but coughs up money to get away from the liability which they just denied.

There. All clear on the murky horizon, yes? 

Edited December 18, 2021 by ThenNow

[MYCVAStory 687]

31 minutes ago, ThenNow said:

Estimation of Value. The TCC sought an “estimation” of the value of claims many months ago. That was a midstream effort to peg only that element - value of the claims - but it would have put a stake in the ground around which to negotiate settlements. Insurers fought that and won. In their minds, an estimation would smell too much like a determination of liability. (See, #3.). The TCC was looking to get all the data on past BSA child sexual abuse settlements to factor into that estimation, along with all the other independently available data on how much the cases are “worth.” However, neither “worth” nor “value” are liability either

We're about to hit "Expert Season" where every party hires experts to make their points or rebut those of others.  The TCC back in September moved  to hire Claro, a firm with expertise in assessing value of such claims.  It was approved in October.   It'll be interesting to see that report as well as others when they all start to see the light.  From the docket https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/7deb7908-df9b-497d-9bf7-0fe922e7707a_6287.pdf

 

[DayNoomp72 1]

4 hours ago, MYCVAStory said:

The TCC back in September moved  to hire Claro, a firm with expertise in assessing value of such claims.  It was approved in October.

Thanks. Who gets the report and what does it mean in for the process. Does the judge decide if everybody needs to use the results? I don’t really get how it is important. 

[DayNoomp72 1]

I read a newspaper article that says lawyers and others get $1billion from this mess. What a shame. Sounds like the coalition group will be 1/2 of that and people billing scouts another huge chunk. Any body know who gets all that? Can the judge force them to give some to survivors? If you pretend you don’t know how to get somewhere and you drive a cab who cares. The meter is still going. 

[johnsch322 524]

7 hours ago, DayNoomp72 said:

I read a newspaper article that says lawyers and others get $1billion from this mess. What a shame. Sounds like the coalition group will be 1/2 of that and people billing scouts another huge chunk. Any body know who gets all that? Can the judge force them to give some to survivors? If you pretend you don’t know how to get somewhere and you drive a cab who cares. The meter is still going. 

That is why I like Uber and Lyft I know how much I have to pay before I get inside.

[MYCVAStory 687]

19 hours ago, DayNoomp72 said:

Thanks. Who gets the report and what does it mean in for the process. Does the judge decide if everybody needs to use the results? I don’t really get how it is important. 

It's all used and entered if/when there's a confirmation hearing. 

[Eagle1993 2161]

BSA has filed an updated version of the 5th amended plan this past Saturday.  At first glance, it is primarily about the Century deal.  However, it changes definition of abuse and a few other topics (including the Charter Orgs).  I haven't read through it fully yet.

Note that it sounds like the various groups already know where the vote is today (8 days until the deadline).  Media likely have some idea of where it is headed.

Finally, there are questions being raised as to how a single claimant class can have a vote right now when the plan is changing.  Some would have voted before and others after this change.  It sounds like this may be a major issue and now require a revote.  The DOJ raised this during the last hearing.  

There is a hearing tomorrow, about delaying the scheduled confirmation.  BSA will fight the delay.

Updated plan below:

3212ae53-bdaa-4a0f-b063-fe9611a43eb2_7833.pdf (omniagentsolutions.com)

8b02f151-4d5c-4d5b-8c09-fae757c90eee_7834.pdf (omniagentsolutions.com)

Microsoft Word - BSA - Modified Fifth Amended Plan of Reorganization (For Filing 9.29.21) (omniagentsolutions.com)

 

[ThenNow 1373]

37 minutes ago, Eagle1993 said:

it changes definition of abuse and a few other topics

I would love to hear the explanation for this and see a line by line comparison of the elements that now constitute abuse. From the jump, the word “pornography” is missing, while it is specifically in the the POC definition of abuse. I didn’t look in the previous iteration of the Plan to see if it’s there. Anyone?

[MYCVAStory 687]

45 minutes ago, Eagle1993 said:

Finally, there are questions being raised as to how a single claimant class can have a vote right now when the plan is changing.  Some would have voted before and others after this change.  It sounds like this may be a major issue and now require a revote.  The DOJ raised this during the last hearing.  

This is a bankruptcy tactic.  Send something out for vote, promise that the settlement will only get better, and if you don't like what has happened in the interim, (the deals made make things worse or better) you use that as justification for the settlement having changed.  Yes, at some point the deal does change enough but the announced Century deal sounded like it had been expected.  What hasn't been expected is the DOJ fighting so hard to reverse the Sackler decision, and winning.  No way the DOJ doesn't fight third-party releases with the BSA bankruptcy.  So, consider that domino effect....the Judge acknowledges that the third cicuit doesn't bind her but she agrees with the DOJ stance and does NOT provide non-debtor third-party releases.  Then,  LCs have said that they won't contribute to the settlement unless their charter orgs are protected.  What do they do then?  Cut off their nose to spite their face and yank themselves out of the deal allowing the BSA national to go it alone, or national acknowledges this and does the same?  Or, do the LCs stay and say "Sorry" to the charter orgs?  Does the judge ignore all of it and eventually rules allowing the releases and let it get dealt with on appeal?  She's aware of this hurtling toward this 800-pound gorilla.  Tomorrow will deal with the delay but everyone will be looking to see if there are any tea leaves to be read on whether she believes she has jurisdiction over the releases.

[Eagle1993 2161]

Purdue Pharma update

Note that an appellate judge rejected the bankruptcy plan.  Purdue has mentioned it will appeal.  There is a twitter thread discussing how long it would take to undo the ruling.  Estimates are in the 9 month range.

So ... the Purdue possible time (Bankruptcy approved in Sept 2021, overturned in Dec 2021.  Best case for Purdue, the overturn ruling could come in September 2022 (1 year after the initial bankruptcy plan was approved)!

So ... think of this ... if BSA's plan is approved in February and then overturned by an appellate judge, it may be Feb 2023 to get that reversed.  The entire time, BSA would then remain in bankruptcy.

It is critical for BSA's plan to be approved; however, even more critical, is that it is built in a way to survive appeals.  

 

[MYCVAStory 687]

5 minutes ago, Eagle1993 said:

It is critical for BSA's plan to be approved; however, even more critical, is that it is built in a way to survive appeals. 

So, that's one vote FOR the plan.  Here's another take, it's critical for this plan to be defeated or rejected NOW to allow the BSA to consider bankruptcy a failure and determine how best to stop the flow of money on this endeavor; money that is NOT going to survivors.   You can't "build" a plan in a way that does not conform to existing laws when your intent is to do the opposite.

[Eagle1993 2161]

Just now, MYCVAStory said:

So, that's one vote FOR the plan.  Here's another take, it's critical for this plan to be defeated or rejected NOW to allow the BSA to consider bankruptcy a failure and determine how best to stop the flow of money on this endeavor; money that is NOT going to survivors.   You can't "build" a plan in a way that does not conform to existing laws when your intent is to do the opposite.

To be clear ... I should have said ... "It is critical for a BSA plan to be approved..."  I personally don't believe this plan is going to survive appeals.  I agree with you that this plan should be rejected.  BSA's current focus seems to be (in this order):

1. Protect high adventure bases
2. Minimize local council payments
3. Speed to confirmation
4. Provide protection for charter organizations
5. Maximizing claimant % approval
6. Risk of overturn in appeals process
7. Youth protection changes

I think their priorities should be:

1. Risk of overturn in appeals process (no reason to have a plan approved that is rejected later)
2. Youth protection changes
3. Protection of local council camps (a bit different than #2 above)
4. Maximizing claimant % approval (I understand claimants will place this higher on the list)
5. Protect high adventure bases
6. Speed to confirmation
7. Provide protection for charter organizations (I just don't see how they protect COs in bankruptcy without risking appeal court losses)