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Chapter 11 announced - Part 11 - Judge's Opinion


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She overrules another group of objectors, except for:

UST & Jane Doe.  They argue section 1129(a)7 is a confirmation requirement.  (This is a requirement to show creditors would get at least as much as they would through Chapter 7).  BSA said this section doesn't apply to non profits.  The judge agrees with UST & Jane Doe.  However, I think the point is moot from what I can see.

Several certain insurer objections are overruled.

Various other issues are punted to the trustee (basically Allianz plans to sue post plan confirmation and the settlement trustee will be the other side of the lawsuit).

There is an issue that the judge cannot confirm all 22 categories of person listed in (d) of the defined term Releasing Claim Holders received notice to release their claims.  

There is an issue with the list of exculpation includes the reorganized debtors & Pachulski Stang.  The reoganized debtors do not exist, so they shouldn't be listed.  Pachulski Stang can only be listed if the settlement is approved.  In addition, debtors must account for setoff and recoupment rights.

That is it.  I'm not a legal expert, but I expect the biggest issue is TCJC.  That was $250M and they will get far less protection than initially planned.  Otherwise, most of the remaining issues appear to be easily fixed.  

My reading was very fast ... so I may have missed something.

 

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I have nothing to say that is worthy of much attention, other than I am SOOO VERY grateful for Eagle1993 and his excellent reverse engineering of this opinion, and other such. I, for one, am indebted

Final plan & exhibits were uploaded last night.  Century supports the updates; however, we may see some fireworks with Guam and possibly the judge.   3b0d7c7a-ca0e-4eab-ad84-f43950dc2b65_1029

A flurry of action today: - The Judge approved the BSA/GSUSA agreement to stop suing each other: cd5eb23c-6a2c-4c70-a015-dc989fbfd257_10193.pdf (omniagentsolutions.com) - The US Trustee/DOJ

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USA Today

A federal bankruptcy judge issued an opinion in the Boy Scouts of America case Friday, approving many portions of the nonprofit's plan to exit bankruptcy while rejecting others. The ruling creates a path for Scouts to move forward but leaves some issues unresolved....

https://www.usatoday.com/story/news/investigations/2022/07/29/judge-oks-boy-scouts-bankruptcy-plan-issues-remain-sexual-abuse/9584367002/

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2 hours ago, Eagle1993 said:

She agrees with the Bate's estimate of $2.4 - $3.6B

I'm going to look at this again, but fairly certain the Bates report is only appropriate for a BSA-only approach.

Basically, they said the historical settlement amounts were allocated as percentages to BSA National, LC's, CO's and others. Then they took the BSA National portion as the basis. But the LC's and CO's are being released. 

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In her conclusion, Silverstein didn’t say whether she was approving or denying the complex compensation fund, but instead simply told the Boy Scouts that they “have decisions to make regarding the plan and need sufficient time to determine how to proceed.”

Silverstein said she would hold a court hearing on the status of the reorganization after Boy Scouts have reviewed her detailed ruling.

More at source:

https://www.bloomberg.com/news/articles/2022-07-29/boy-scouts-must-change-2-7-billion-sex-abuse-fund-judge-rules

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4 hours ago, Eagle1993 said:

TDP (Boy Scouts of America Trust Distribution Procedures for Abuse Claims) Findings ...

 ... she will not find the TDPs as "fair and equitable settlement of Abuse claims" as she does not see a need to do this to confirm the plan.

 ... she will not find the TDPs under Historical Consistency Finding.  Again, she doesn't think she needs to do this to confirm the plan.

... she will not find the TDPs under "The Binding Finding" ... unnecessary

...she may agree to "They Allowed Claim Finding" .. however, needs an update

.. she will not find the TPDs under "The Good Faith Finding"

Basically, she is punting the TDPs to future litigation as needed.  Major win for non settling insurers.

 

What is they allowed claim finding mean. 

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The way I look at this.

1) BSA and LDS need to talk. LDS likely had 3 options.  Walk away from the plan, pay $250M but go with the standard charter releases or try to offer less and go with the standard charter releases.  

2) BSA and settling insurers must decide if it is ok to punt on the guam insurance transfer and to accept a few minor changes to the plan.  My guess is they do.

3) BSA will likely have to remove many of the 22 groups they included in the plan they didn't notify.   It is a risk going forward but they can't delay this further. 

4) BSA, TCC and Coalition will have to determine if the ruling on the TDP is ok. Probably not much to be done, it is what it is.

The good news is that the BSA has a path to clear get to plan approval.  My guess is that it may take a few weeks to a month to update.  Then perhaps time for objections to the changes.  My hope is by end of September they get plan approval. 

 

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50 minutes ago, PaleRider said:

What is they allowed claim finding mean. 

It is not exactly clear to me, but as I understand it ... The proponents of the plan wanted the judge to rule with certain findings supporting the TDPs.  That be would give the trustee more leverage when asking non settling insurers to pay up.   The bankruptcy judge denied this and basically said it by is up to future courts to decide on a case by case basis.  So, it gives the non settling insurers a bit more leverage.   

As I understand it, the TDPs will still be used, they just carry less weight if they are used in future court cases.  

 

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This doesn’t look good to me…I am not close to being educated on this though.

I think my LC could survive setting its claims. Maybe it is time for other LC’s to break away.

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20 hours ago, Eagle1993 said:

She rejects the third party releases for TCJC (Church of Jesus Christ of Latter-day Saints} as they went too far.  That is why she is excluding their $250M settlement as she expects that may change.

 

The issue is TCJC were attempting to clear out mixed claims.  She is ok clearing out pure scouting abuse from TCJC, but mixed claims are a bridge too far.

 

So ... "... I decline to approve the TCJC (Church of Jesus Christ of Latter-day Saints) Settlement."

By “mixed claims” do you mean claims where it’s not clear that the abuse happened within the context of scouting?  The Church and the scouting program were so intertwined, it would not be surprising if that were the case. 

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22 hours ago, Eagle1993 said:

Please keep the discussion civil.  

I hid off-topic posts. Let's get back on topic, the Judge's opinion.

thanks,

RS

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3 minutes ago, johnsch322 said:

And you keep @skeptics comments stand when they are not part of the judges opinion?

No I did not. His post was hidden too.

Edited by RememberSchiff
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20 hours ago, clbkbx said:

I'm going to look at this again, but fairly certain the Bates report is only appropriate for a BSA-only approach.

Basically, they said the historical settlement amounts were allocated as percentages to BSA National, LC's, CO's and others. Then they took the BSA National portion as the basis. But the LC's and CO's are being released. 

I was wrong about this. The most recent version includes related entities. 

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