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


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I feel inclined to mention that I am in no way a legal expert, nor did I stay at a Holiday Inn Express last night.  I very well could be wrong and welcome both dissenting and concurring opinions.  

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This is Doug Kennedy, a member of the TCC.  First, I want to thank all of you for your comments over the past 18 months.  Your comments and those in other forums, whether I disagree with them or not,

Scouter.com is not well liked by National and believe me, while we are all scouters, we have various opinions of BSA.  I think if BSA fails, we will help build up a new scouting organization. If you w

Normally I wouldn't discuss user issues, but given his profile pic and signature I'm going to make an exception: Regardless of the impression given by his profile picture and signature line, Cyni

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11 hours ago, SiouxRanger said:

Or, let everyone over the age of 3 in Uruguay vote also.  They have as much legal interest in the outcome of the vote as claimants with expired, legally unenforceable claims.

 

And, I also want to vote on your next pay raise, as long as I get 10% of the raise I vote for.

It’s easy to be glib and rest on “it’s just the law” when it’s not your life; not your pain; not your tens of tens of tens thousand of dollars lost and expended in often futile efforts to staunch the “bleeding;” not your marriage, career, child’s life destroyed or mangled by a dark force inside you; and not your gut and heart and soul and experience that was poured out on the unqualified invitation by BSA to, “Come forth all ye lowly and beleaguered and aggrieved so we can equitably compensate you, ye who were abused in Scouting!” Way too easy. Way, way, way. We get the point. It’s been fired from multiple angles and multiple people. You’ve said it many times, already. 

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47 minutes ago, ThenNow said:

It’s easy to be glib and rest on “it’s just the law” when it’s not your life; not your pain; not your tens of tens of tens thousand of dollars lost and expended in often futile efforts to staunch the “bleeding;” not your marriage, career, child’s life destroyed or mangled by a dark force inside you; and not your gut and heart and soul and experience that was poured out on the unqualified invitation by BSA to, “Come forth all ye lowly and beleaguered and aggrieved so we can equitably compensate you, ye who were abused in Scouting!” Way too easy. Way, way, way. We get the point. It’s been fired from multiple angles and multiple people. You’ve said it many times, already. 

@ThenNow ... It's hard to keep this dispassionate.  It's an ugly subject obviously.  Ugly for victims.  And ugly to those watching it go thru the process.  

I'm not sure if SiouxRanger has said it that many times himself.  He's probably reflecting what many believe.  Many find it hard to understand how those with effectively no legal standing are involved in voting on this.  

QUESTION - Is that true?  They have no standing?  Or is it that their potential claim against their LC is time-barred, but they can still pursue BSA.  

If both, then it seems fairly easy to look at the fifty states and broadly remove those in time barred states as settlement voters as they don't show any standing.  The grey area are those who's standing is unclear.  ... It just seems wrong to have those who  would clearly have no legal standing vote.  

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15 minutes ago, fred8033 said:

QUESTION - Is that true?  They have no standing?  Or is it that their potential claim against their LC is time-barred, but they can still pursue BSA.  

If both, then it seems fairly easy to look at the fifty states and broadly remove those in time barred states as settlement voters as they don't show any standing.  The grey area are those who's standing is unclear.  ... It just seems wrong to have those who  would clearly have no legal standing vote.  

Standing is a matter for a court to decide. It requires a hearing to demonstrate standing. Regardless, anyone can sue anyone at any time for any thing. Will they win? Who knows. Will it be tossed out on summary judgement? Maybe. Do they have a right to be heard? Yes. Will some of us be twice “barred” without a chance to be heard, preemptively, if votes are not universally allowed? Yes. If I have a fraudulent concealment case that is not heard because I am preemptively kicked to the curb since the three states in which I was abused are “closed,” is that a denial of my rights? Yes. Immoral? Yes. Dishonorable? Yes. Would I prefer not to file that case in three jurisdictions and simply proceed to do it all before the Settlement Trustee? Yes. Will I forgo doing so if disallowed a vote? No. I will make it happen immediately, if not sooner,” as my mom liked to say.

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22 minutes ago, fred8033 said:

I'm not sure if SiouxRanger has said it that many times himself.  He's probably reflecting what many believe.  Many find it hard to understand how those with effectively no legal standing are involved in voting on this.  

I believe he has said it multiple times in different contexts, though never before impugning and excluding Uruguayans three and under.

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Interesting status in the Purdue Pharma case.  I've been following the journalist from WSJ who covers both this case and the BSA.  There are parallels as there are channeling injunctions.  In addition, both cases, the US Trustee has been fighting the plans.

Now, in the Purdue Pharma case, the US Trustee  (DOJ) is attempting to stop the decision.

https://www.nytimes.com/2021/09/16/us/politics/sackler-bankruptcy-plan.html

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William K. Harrington, the U.S. trustee for the Justice Department, filed a motion in federal court to halt confirmation of the settlement while the department appeals the judge’s decision to approve the deal.

Kosnoff tweeted about this as well ... but the US Trustee has been ignored in the BSA case for a long time.  He has been consistent that he sees the Plan 4, 3, etc. as not allowed by US Bankruptcy law.  What happens if the US Trustee files an objection and halts progress (assuming Judge Silverstein approves the plan)?  I don't think this is a minor risk ... this could be an 11th hour delay that could last a LONG time in appeals.

I certainly hope BSA has a  plan B just in case this happens (or better yet, address the US Trustee's concerns up front).  I'm still waiting to see the US Trustee's response to Plan 5.

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58 minutes ago, fred8033 said:

QUESTION - Is that true?  They have no standing?  Or is it that their potential claim against their LC is time-barred, but they can still pursue BSA.  

This is where civil procedure folks go insane, but, GENERALLY (and note the word here, GENERALLY) the laws of the state in which the alleged tort took place are applicable as to any/all defendants

If a North Carolina scout was taken to a summer camp in Georgia and sexually abused there, Georgia law applies. Therefore, if the NC scout wanted to sue, they would have to go to a GA court and sue the LC and BSA under Georgia law.

Now, let me give two big, massive, exceptions.

1) Long-arm statute: allows for a court to obtain personal jurisdiction over an out-of-state defendant on the basis of certain acts committed by an out-of-state defendant, provided that the defendant has a sufficient connection with the state. New York is famous/infamous for this. If you are a Texas company and you advertise to customers in NY your defective toaster on your website, NY will assert you are doing business in the state and therefore subject to NY courts (and NY tort law). There's another version of this in...

2) Place of occurrence was NJ, NY, or DC (not Georgia): Let's use that North Carolina scout abused in a Georgia summer camp for a second. The council controlling that camp is a Georgia council. Based on the statute of limitations in GA, the scout's claim against BSA and the LC ran out of time years/decades ago. BUT some lawyers have tried to claim that while the ABUSE happened in Georgia, the NEGLIGENCE AND COVER-UP of the abuse was directed and controlled by BSA National which was headquartered at various times in DC (Congressional Charter), NJ, and NY, had the IV files, etc. Those three are important because they have opened up the statute of limitations (NY was temporary) in the past. This is a novel approach and argument and so far has been untested in court (the bankruptcy paused those cases for now).

The other version is that NC/GA scout again. The abuse was in Georgia, but the abuse also took place back at the troop in NC (which had a statute of limitations window open). Therefore, while the GA abuse may be time barred, the NC abuse may not be.

Edited by CynicalScouter
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13 hours ago, SiouxRanger said:

Yep.

 

Or, let everyone over the age of 3 in Uruguay vote also.  They have as much legal interest in the outcome of the vote as claimants with expired, legally unenforceable claims.

 

And, I also want to vote on your next pay raise, as long as I get 10% of the raise I vote for.

 

I agree with acema606.

I may be wrong but I think that one of the outcomes of a bankruptcy is to prevent lawsuits arising from prior bad acts or liabilities before the filing of the bankruptcy.  If that is the case then if those who abused and live in states which are closed become open states post bankruptcy would then have the right to litigate if not included.  Hence their vote and need to be included in the settlement is necessary. 

As for those over the age of 3 in Uruguay and getting 10% of a pay raise is totally uncalled for.  Those who live in currently closed states are as invested in this case as any who are in open states and we are not talking about a pay raise here we are talking about equitable compensation for victims of abuse.  

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6 minutes ago, johnsch322 said:

If that is the case then if those who abused and live in states which are closed become open states post bankruptcy would then have the right to litigate if not included.  Hence their vote and need to be included in the settlement is necessary. 

Which is why Zalkin and Pfau have argued one way to address this is apply the scaling system (Gray 1/2/3 or some other system) on the FRONT end. For example:

1) A victim from an open statute of limitations state gets $1 or 1 vote.

2) A victim from a closed state (like Alabama) gets 10 cents or 1/10 of a vote.

This addresses the imbalance of a) victims with live claims in the here and now against b) speculative claims that may or may not ever be eligible to enter in a state court some day in the future.

It also means trying to parse out 82,500 claims and "weighing" them and telling some victims they are more or "less" worthy than others.

Nightmares on top of nightmares.

BSA called this putting the cart before the horse: use the scaling factors at the BACK end (settlement trust), not now.

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16 minutes ago, CynicalScouter said:

It also means trying to parse out 82,500 claims and "weighing" them and telling some victims they are more or "less" worthy than others.

I would also say it would open the door for other arguments such as a claim might be worth more (penetration vs touching fully clothed) so that claim should have a larger say (bigger vote).  Or a false claim that is worthless so you would have to investigate every claim.  That is a Pandora's Box that I am sure that the court would not want at this juncture.

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38 minutes ago, CynicalScouter said:

This is where civil procedure folks go insane, but, GENERALLY (and note the word here, GENERALLY) the laws of the state in which the alleged tort took place are applicable as to any/all defendants

If a North Carolina scout was taken to a summer camp in Georgia and sexually abused there, Georgia law applies. Therefore, if the NC scout wanted to sue, they would have to go to a GA court and sue the LC and BSA under Georgia law.

Now, let me give two big, massive, exceptions.

1) Long-arm statute: allows for a court to obtain personal jurisdiction over an out-of-state defendant on the basis of certain acts committed by an out-of-state defendant, provided that the defendant has a sufficient connection with the state. New York is famous/infamous for this. If you are a Texas company and you advertise to customers in NY your defective toaster on your website, NY will assert you are doing business in the state and therefore subject to NY courts (and NY tort law). There's another version of this in...

2) Place of occurrence was NJ, NY, or DC (not Georgia): Let's use that North Carolina scout abused in a Georgia summer camp for a second. The council controlling that camp is a Georgia council. Based on the statute of limitations in GA, the scout's claim against BSA and the LC ran out of time years/decades ago. BUT some lawyers have tried to claim that while the ABUSE happened in Georgia, the NEGLIGENCE AND COVER-UP of the abuse was directed and controlled by BSA National which was headquartered at various times in DC (Congressional Charter), NJ, and NY, had the IV files, etc. Those three are important because they have opened up the statute of limitations (NY was temporary) in the past. This is a novel approach and argument and so far has been untested in court (the bankruptcy paused those cases for now).

The other version is that NC/GA scout again. The abuse was in Georgia, but the abuse also took place back at the troop in NC (which had a statute of limitations window open). Therefore, while the GA abuse may be time barred, the NC abuse may not be.

As always, thank you.  The detailed reasoning is very useful and I am grateful.

My interpretation of your writing is that potentially not a single claim is time-barred in this bankruptcy.   Potentially.   BSA owns the program and BSA has been incorporated in SOL open states.  So even if the incident is in a closed state and the unit / CO and LC were all in closed states ... and even if the DE / SE and BSA oversight individuals' offices were in closed states, the BSA organization itself was incorporated in open states.  ... effectively jurisdiction shopping ... 

@CynicalScouter ... Going for a far stretch that I could see some court pulling in.  ...  At some point, it seems the commerce clause of the constitution comes in.  How does an organization as BSA function across nation wide  when individual states such as NY can change laws effectively putting companies like BSA out of business. 

I really question whether organizations like BSA should exist anymore.  Instead, should BSA be designed more like a standards body (think IEEE) that is funded by members and provides structure and standards.  Places like Philmont should be also independent to serve nation wide under that same organization body. 

To be honest, I bet BSA often sees itself more like IEEE than McDonalds. 

 

 

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28 minutes ago, johnsch322 said:

Those who live in currently closed states are as invested in this case as any who are in open states and we are not talking about a pay raise here we are talking about equitable compensation for victims of abuse.  

No.  It's not that they are "as invested".  It's that it's just too hard to figure out right now and the answer is being kicked down to the future to clarify.  

Again ... "As invested" ... Emotionally absolutely.  Morally yes.  The question is legal standing is not clear.  That's the debate.  If they don't have legal standing to sue, then no they are not as invested even if they went thru something incredibly ugly and hurtful.  ... Current legal actions (voting on settlement) can't be based on possible future legislative action. 

The debate is can it be based on probable legal standing as it's too difficult at this exact moment.  ... but ... if it's clear they don't have right to funds, they don't get a say.  ... that was the reason for the comment about Uruguay votes.  ... there is a ridiculous aspect to those without legal rights voting on a settlement.  

 

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1 minute ago, fred8033 said:

At some point, it seems the commerce clause of the constitution comes in.  How does an organization as BSA function across nation wide  when individual states such as NY can change laws effectively putting companies like BSA out of business. 

The same way that California can impose higher emissions standards than other states. The Supreme Court has said that the commerce clause does not mean states cannot impose requirements on businesses doing business in that state PROVIDED it treats its own "domestic" businesses the same.

For example, if California's emissions rules said "All cars manufactured outside of California are not required to meet the emissions standards; all other cars must" that would violate the commerce clause. It's sometimes called the dormant commerce clause: states are free to enact their own tort laws SO LONG AS they hit every company from everywhere equally. https://en.wikipedia.org/wiki/Dormant_Commerce_Clause

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Courts first determine whether a state regulation discriminates on its face against interstate commerce or whether it has the purpose or effect of discriminating against interstate commerce. If the statute is discriminatory, the state has the burden to justify both the local benefits flowing from the statute and to show the state has no other means of advancing the legitimate local purpose.

First question, does NY opening up its statute of limitations impact interstate commerce? Sure.

Second question: does it have as its PURPOSE to discriminate against commerce from other states? In other words, is NY picking on BSA because BSA is in Texas? No.

Third question: does it have as its EFFECT to discriminate against commerce from other states? In other words, even if NY didn't mean to pick on BSA because BSA is in Texas, is that the result? Again, no.

That ends the discussion. But the fourth question (we didn't get to) is even if NY could be shown to be discriminating against BSA because it was based in Texas, is there some justification for picking on Texas? Etc.

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7 minutes ago, fred8033 said:

The question is legal standing is not clear.  That's the debate.  If they don't have legal standing to sue, then no they are not as invested even if they went thru something incredibly ugly and hurtful.  ... Current legal actions (voting on settlement) can't be based on possible future legislative action. 

The debate is can it be based on probable legal standing as it's too difficult at this exact moment.  ... but ... if it's clear they don't have right to funds, they don't get a say.  ... that was the reason for the comment about Uruguay votes.  ... there is a ridiculous aspect to those without legal rights voting on a settlement.  

My rebuttal is that this is a bankruptcy issue and one of the responsibilities of the court is to make BSA a viable  entity (as a corporation) post bankruptcy.  It could not be viable in financial sense if they are left with with potential lawsuits from prebankruptcy in the post bankruptcy period.  There was a deadline to file a claim and if you did according to the judge (all claims prima facie) then they have legal standing.  If you have legal standing you have the right to vote.

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6 minutes ago, CynicalScouter said:

... excellent write up ...

Perhaps I'm just too jaded ... I'm not a lawyer.  I have ready many court decisions over the years.  Bad habit formed after taking college constitutional law course.  From what I've seen, courts justify decisions to get a fair result as much as they interpret existing law.  I could see somehow the commerce clause interpreted this whole situation effectively feels unworkable.   

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