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Chapter 11 Announced - Part 7 - Plan 5.0 - Voting/Confirmation


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As the time that a vote total approaches, I encourage everyone to repeat the Scout Oath and Law several times to remind us how to treat one another.  There are victims here who wish for the plan

I just finished reading Bates' report.  Now I have a headache.  It's well-written, but a bunch of spin.  So we're too old to deserve a decent settlement?  While I get the sol issue, if a suit is valid

66% is the threshold for a bankruptcy.  However, WSJ was reporting even BSA admitted they needed 75% which they didn't reach.  There are two issues that the 73% causes. One will be with Silverste

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52 minutes ago, Eagle1993 said:

Including the TCC?  The sides were so far apart on financials and structure of the plan.

 

It was stated in such a way as to include all parties to the mediation. I stand ready to be corrected. From what I understand, the TCC is heavily engaged in mediation. If they didn’t agree with that statement, Dr. Kennedy and their counsel likely would have been waving the hot little 🖐 like it was on 🔥. My thinking, for what it’s worth.

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10 minutes ago, RememberSchiff said:

Lets get back on topic. thanks, RS

I guess you did not understand what was written so you decided to remove it.  I believe that is called censorship not moderating.

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Some, perhaps including the DOJ, seemed to think this is a waste of time.  It definitely seems like they are headed to plan confirmation.  If the plan changes greatly, I expect it will have to go out to vote again.  

In terms of beating a dead horse ... the reality is that the judge has not really ruled on any element of the plan.  So, the plan is not dead and her rulings will help (hopefully) provide more guidance to get to a plan that can be confirmed.

Given how long each vote will take (and the expense) I expect BSA and others would like the next plan to be approved ... they don't want to keep iterating.

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1 hour ago, ThenNow said:

How to avoid getting Purdued? Increase the “accept” vote tally and get more money from third-party non-debtors. 

https://news.bloomberglaw.com/bankruptcy-law/sacklers-states-near-bigger-purdue-pharma-opioid-settlement

I didn't get the sense that the amount of money was the issue.  The issue is that if there is nothing in bankruptcy code that specifically allows nonconsensual releases of non debtors.  There is also a constitutional question (Article I courts vs Article 3 courts).

My understanding and will definitely welcome input.

In terms of the constitution, the Supreme Court is the only federal court established by the Constitution.  Based on the Constitutional Convention, the SC determined that Congress can establish courts under Article III with judicial powers and Article I with legislative powers (regulatory).  Bankruptcy courts fall under Article I.  Their judges are not lifetime appointments (vs Article III which are lifetime).  One concern raised is that Article I courts cannot take on Article III duties.  So, when non debtors get non consensual releases, an Article I court is abusing their constitutional authority over Article III courts.  This part will likely go to the Supreme Court.  

The other aspect of Purdue, which apparently is the bigger deal, is that since there is no statutory basis for a bankruptcy court to approve a release of such claims.  Basically, bankruptcy courts cannot invent the ability to include powers they were not given.

It sounds like the 3rd circuit believes the constitutional powers are there but haven't ruled on the statutory issue.  I guess I wonder if the real issue is that if someone rejects the plan, they should still have the right to sue non debtors (so the plan is only for individuals who accept it).

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2 hours ago, ThenNow said:

 

How to avoid getting Purdued? Increase the “accept” vote tally and get more money from third-party non-debtors. 

 

I’m going to find a “tongue in cheek” emoji. Be right back. You guys are soooo serious. 🧐  (Purdue is trying not to get Purdued. That’s funny. Ya feel me??)

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2 hours ago, ThenNow said:

How to avoid getting Purdued? Increase the “accept” vote tally and get more money from third-party non-debtors. 

https://news.bloomberglaw.com/bankruptcy-law/sacklers-states-near-bigger-purdue-pharma-opioid-settlement

For the Boy Scouts and their accomplices, I would say maybe triple or at least double what's on the table now may not work.

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My totally uninformed guess, is that the current plan, with maybe some slight non-monetary tweaks that come out of mediation, gets approved.  Mostly because no other alternative seems viable.

There’s no reason to think that a plan that necessitates a new vote is going to result in any more decisive a result than this one.  Maybe more funds gets a slightly higher percentage approval, but it’s very likely that the voting participation rate drops, and so the clarity of a new vote being a representation of the will of the claimants doesn’t change.  Part of the challenge is that it’s hard to negotiate with 80,000 people, and it’s clear that no one can speak with one voice in their stead.  The TCC may hold their beliefs sincerely, but the people they’re supposed to represent rejected their recommendation soundly.  Unless they’ve done some soul searching and really changed their stance, their views simply aren’t in step with a majority of claimants.  Similarly, the Coalition may legally represent a majority of claimants, but I haven’t seen any evidence that they can deliver approval votes in any higher proportion than they already did.

If third party releases simply aren’t allowed as a matter of law, then the last two years are for naught, and we’re staring over.  But as I understand it that’s not yet decided in this circuit, so for this judge the proper thing is approve a plan and see if a district or circuit court wants to make that decision.

So that leaves move this plan forward, because there are still lots of issues that can’t be decided until this first step is taken.

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22 minutes ago, T2Eagle said:

Mostly because no other alternative seems viable.

What ever happened to BSA's threat of a BSA National only cramdown.  Have they made to many promises too to many 3rd parties? This is the alternative that seems to be the best as more and more states open up their statute of limitations.

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56 minutes ago, T2Eagle said:

My totally uninformed guess, is that the current plan, with maybe some slight non-monetary tweaks that come out of mediation, gets approved.  Mostly because no other alternative seems viable.

The issue is that the Judge cannot invent/modify laws because there is no other alternate plan.  There is always options of National only or consensual nondebtor releases.  

She was clear that she will evaluate statuary aspects of the plan, releases and injunctions.  She previously said she had concerns and marked up sections.  DOJ was clear that this plan is non confirmable ... it violates law.  TCC has also been clear it violates law. 

The changes could be substantial and impact settlement amounts.  

While possible, I find it highly unlikley the current plan is approved.  I do look forward to seeing the update later this week (perhaps in the form of a RSA).

Note that even if TCC & most claimants join in (for example, Purdue had 95%) there is risk with including nonconsensual nondebtor releases.  The only way to avoid fully is making them consensual.  Otherwise, this will be risky (which may be necessary).

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34 minutes ago, johnsch322 said:

What ever happened to BSA's threat of a BSA National only cramdown.  Have they made to many promises too to many 3rd parties? This is the alternative that seems to be the best as more and more states open up their statute of limitations.

I was thinking viable regarding the current process.  Yes, a BSA national only plan is an alternative, but it would mean effectively starting the whole process over again having achieved nothing.  It wouldn't change anything fundamental about the monies available to be fought/negotiated over, simply send most of those fights and negotiations into a string of dozens of other bankruptcies.  It would, more importantly, ignore the expressed opinion of a majority of claimants that the current deal is acceptable.

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6 minutes ago, T2Eagle said:

I was thinking viable regarding the current process.  Yes, a BSA national only plan is an alternative, but it would mean effectively starting the whole process over again having achieved nothing.  It wouldn't change anything fundamental about the monies available to be fought/negotiated over, simply send most of those fights and negotiations into a string of dozens of other bankruptcies.  It would, more importantly, ignore the expressed opinion of a majority of claimants that the current deal is acceptable.

I agree.  I think the parties all want a broad settlement that is robust legally.  Now, there is a chance, that the district courts all agree that nonconsensual releases for non debtors are no longer allowed, but I get the sense that the judge will push through one that complies with the law as she sees it today.  

Yes, BSA floated the national only, but that was a threat not a real proposal.  I saw that as a ... well, you want to see how bad this can get ...  I don't see that getting 66% of the vote.

My guess as of today is that there will be a mechanism for LCs & COs to be included ... but the amount they pay and releases (who and what) they are granted may change.

Crossing my fingers that magic happens this week.

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21 minutes ago, T2Eagle said:

I was thinking viable regarding the current process.  Yes, a BSA national only plan is an alternative, but it would mean effectively starting the whole process over again having achieved nothing.  It wouldn't change anything fundamental about the monies available to be fought/negotiated over, simply send most of those fights and negotiations into a string of dozens of other bankruptcies.  It would, more importantly, ignore the expressed opinion of a majority of claimants that the current deal is acceptable.

I think you may be mistaken. It would not be a having to start over situation and would make what ever the state courts decisions are as restitution. For many that would be much more than is in this plan. 

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