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Chapter 11 Announced - Part 9 - Confirmation Hearing


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5 hours ago, fred8033 said:

This a previously discussed insurer concern.  Months ago?  Year+?   Insurers saying they are being thrown under the bankruptcy bus without the policy holder helping triage / defend the claims.   Instead, the policies will be held by a trust who's interest is to get the most possible from the insurer.  

Question:  Is this really different than other huge insurance claims.  Bankruptcy is like the insured going out of business.  Further liability is passed up to the insurance company?  Once the insured maxed out how much to pay, the insured stops defending the claim.

I never saw a policy that stated the insured could do everything he wanted to worsen the claim.  Mostly, they require full cooperation of the insured.  And not necessarily for a lower rate, as was previously mentioned.  So, yep, it is standard procedure.

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Dr. Doug Kennedy made an impassioned speech to the court and asked the Judge to keep her focus on the survivors as she makes her decision(s).  Jessica Lauria thanks the court for the time devoted.   A

Annnnd....Judge has now said that she will give this another 45 minutes and pick things up in the morning.  Thus far the only clear winner in all of this is "Billable Hours."  

Missed this morning so far. Yesterday ... my takeaways. Bankruptcy US Trustee's path is clear .... go after the fact that some releases are being given with no contribution.  One o

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2 hours ago, Eagle1993 said:

A psychologist for certain insurers was pushing to require all TDPs to go through a certain specific level of testing prior to payment.  She made some very interesting points, including that around 40% of the individuals she has dealt with were false claims (at least based on certain standards).   Her main point is that self questionaires are almost worthless in ensuring claims are valid.

That said ... what she is asking is unprecedented.  In addition, it would take on the order of nearly $200M and 187 person years of work.   It would probably work on a very small scale, but wouldn't fit this case.

Very nice woman who is very concerned that money will go to fraud vs actual victims, but her solution is probably not feasible.  (My opinion after listening to cross).

 

There must be middle ground that washes out claims lacking credibility without further traumatizing valid claimants.  If the payout was 7 figures, I would fully expect serious testing.  If, however, a Grey state victim is headed for 4 or low 5 figures, they can't really expect much.   And as we know, $3500 will require nothing.

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8 minutes ago, Eagle1970 said:

There must be middle ground that washes out claims lacking credibility without further traumatizing valid claimants.  If the payout was 7 figures, I would fully expect serious testing.  If, however, a Grey state victim is headed for 4 or low 5 figures, they can't really expect much.   And as we know, $3500 will require nothing.

I think there is flexibility and I would expect the trustee will require an increasing amount of evidence for higher and higher payouts.  

Prof. Jacoby brought up a good point...

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#BoyScouts suggesting best practices literally cannot be done with this volume of abuse cases. "Real world considerations"  
(more likely indicates risks of mass aggregation of this kind of alleged harm).

Hindsight is 20-20 ... but I do think a lot more vetting & work should have been done up front.  Perhaps instead of just a proof of claim, claimants may have had to submit the form(s) she mentioned.  Perhaps law firms should have had to fund it for their clients. My guess is that we would have seen far fewer claims, those claims would have been validated and the negotiations may have gone faster.  The downside is that those who are poor and/or did not have good access to lawyers would have been left out.  So, with everything, there is competing priorities.

That said, we are where we are.  It sounds like the plan does have tools to prevent big payouts to fraudulent claims.  While in a perfect world, fraudulent claims would receive 0, I just don't see how that is possible without spending far more money than would be saved.

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5 hours ago, Eagle1970 said:

I never saw a policy that stated the insured could do everything he wanted to worsen the claim.  Mostly, they require full cooperation of the insured.  And not necessarily for a lower rate, as was previously mentioned.  So, yep, it is standard procedure.

Thanks.  I fear I'm watching this more than I ever watched any single sporting event.  :(   ...  I'm still wondering how all the insurance will wash out.  ... I know it's been explained to me before, but it feels like it's a pressure game and seeing who flinches first. 

Not looking for an answer, but I read documents like this one ...

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/17379ed6-8eb0-454b-bf0a-ed5187df49c1_BSA_Coverage_Charts_consolidated.pdf

... and wonder ... why would some of the insurance companies ever settle?  Insurance is stacked.  Many of the policies provided "excess" insurance to pay damanges after a first portion is paid.  There are thresholds.  If the first source of insurance settles for less than the "excess" threshold, I just don't get why the later insurance would be triggered, ever. 

In the 1990s, I benefited (a payout) from a class action against BCBS (Blue Cross Blue Shield).   BCBS negotiated invoice discounts on their portion of the bill, but did not pass the discount to the insured.  The insured was paying based on the raw invoice.  So if the insured per contract was to pay 20%, the reality was the insured was often paying a far higher percent because BCBS had their privately negotiated discount.  ... That seems analogous here.  ... I don't get how some of the tiered insurance companies will be liable to pay when the primary insurance settles for less than the amount that triggers the excess.  

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16 hours ago, MYCVAStory said:

Says they come from the "Boy Scouts Defense Fund."  Document presented showing that yes, the insurers are paying her.  "Yes, but they still come from the defense fund?!" 

BSA National just called. They want immediate access to this "Defense Fund" and asked who's been holding out on them. 

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20 minutes ago, ThenNow said:

BSA National just called. They want immediate access to this "Defense Fund" and asked who's been holding out on them. 

It was really a forehead-slapping testimony at times.  "I can tell you that 40-45% of claims are fraudulent."..... 30 minutes later....  "I don't know who's paying me.  The checks come from the Boy Scouts Defense Fund."  Really now?

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19 minutes ago, MYCVAStory said:

It was really a forehead-slapping testimony at times.  "I can tell you that 40-45% of claims are fraudulent."..... 30 minutes later....  "I don't know who's paying me.  The checks come from the Boy Scouts Defense Fund."  Really now?

Her heart was in the right place.  However, I don't understand why she was even a witness and the insurance companies should have prepared her more.  Now ... she would have been a good witness about 2 years ago ...

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Watching the insurers ... I think their best line of attack is against the neutral path.  That came in late to the plan and may not have been vetted as well as it didn't go through 2-3 iterations.  In addition, it sounds unique to trusts and DOJ & the judge both questioned it a lot.  Finally, it seems like the one that may not be insurance neutral.

Right now, it seems like they took the shotgun approach.  Spray a lot of lead and see what hits.  I'm not sure that will be as effective.

My only thought is that they want to delay it ... so if they only blow 1 hole in the plan, that could be fixed and then the case would close.  They may want to try and blow many holes to delay it further.  I just don't see them as being effective (at least yet).

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Hearing ends.   Insurers spent the afternoon raising doubt about the validity of mass tort attorneys' client intake practices.  When asked when closing arguments might be heard Debtor's attorney said she wants to speak again regarding progress on youth protection measures, good faith, and third-party releases.  Additional discussion will be presented related to the TDP, insurance neutrality, and a bunch of other objecting issues.  She saw two days of closing arguments.  Judge has her own list including "Appropriate standard for her decisions related to the TDP and mentioned fair and appropriate"  Also wants discussion of automatic stay issues raised by Guam objectors.  For third-party releases she is interested in why she should grant them IF she has constitutional authority to do so.  Cautioned attorneys that she tends to ask a lot of questions.  Pro Se claimant who is incarcerated will have arrangements made so he can speak.  Debtor must also give opportunity for any pro se objectors who have filed objections be able to make arguments. 

She scheduled it all for Wednesday and Thursday 4/6&7 but has a commitment Thursday AM.  Sounds like a bit of a longshot for it all to be done in two days.

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I watched all of the confirmation hearing today and must admit I was very disturbed while watching Ken Rothweiler's testimony. It was if he raised his voice loud enough and tried to answer 10 questions which were not asked of him, acted like he himself was a victim and at the same time was ignorant of facts that nobody would question his sincerity.  Coupled with KR saying he was signing POC's just to make sure that everything was filled out and not as to the validity of them. On top of that the lawyer who admitted he didn't really read and just gave his staff a blank POC with his signature on it to use and the biggest bozo who could not explain how his firm submitted POC's without claimant names and I really have doubt to how many actual survivor claimants there are in this bankruptcy.  

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1 hour ago, johnsch322 said:

On top of that the lawyer who admitted he didn't really read and just gave his staff a blank POC with his signature on it to use and the biggest bozo who could not explain how his firm submitted POC's without claimant names and I really have doubt to how many actual survivor claimants there are in this bankruptcy.  

Quite right.  This is why an unbiased independent Trustee was so important to the TCC and important to Survivors.  The Coalition wanted its designated Trustee and one can only assume that was to get awards out the door.  If your firm is getting 40% of an award your motivation is to have Trust personnel in place who won't delay that money going out by taking care of that pesky validation.  NO Survivor wants unnecessary delays but if it means money going to those who deserve it only then a reasonable process and wait is time and effort well spent.  At this point, even if the judge confirms and says "The Trust needs to worry about validation" then the insurers have done us all a favor by highlighting the issue.

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I know this NPR article is a year old regarding the PG&E Ch. 11 BK and Trust Fund set up to compensate 67,000 fire victims but it's probably an idea what survivors/claimants can expect with the BSA BK Trust Fund (likely similar to other mass tort BKs as well). Trust will rack up huge attorney fees with slow payout to victims: 

PG&E Fire Victim Trust Racks Up $51 Million In Fees As Survivors Wait For Help : NPR

It really never ends does it....the greed that is....

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9 hours ago, InquisitiveScouter said:

The heart is deceitful above all things, and desperately wicked.  Who can know it?

He who searches all things, including the heart.

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This morning, a witness is going on and on that the TDP isn't like how it would be handled in tort.  Well, correct.  This isn't tort, this is bankruptcy.  I'm barely listening, but I could easily dimiss this through cross.

Questions... do you have experience in bankruptcy?  Do you have experience in TDPs?  Do you have experience in trust distributions?  Thank you and goodbye.

This seems to be a waste of time.

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