Chapter 11 announced - Part 13 - Post District Court Affirmation

[mrjohns2 577]

I assume if the council didn’t pledge the land, then they keep the excess as they are paying money. 
 

A more specific question is what happens to the excess of land was pledged and it greatly exceeds the estimate?
 

What if it undersells? 

[Eagle1993 2160]

2 minutes ago, Eagle94-A1 said:

Stupid question: what happens to the excess money from sales?

I know my council made 10x the appraised value of one camp they sold, and made at least 4x what their contribution from property sales was supposed to be.

 

Here is the funny thing. The unit volunteers were told none of the money from the camps' sales was going to the lawsuit.

A former exec board member, when I told him what the unit serving were told stated "That is not what they told us (exec board)."

(sarcasm on) I love my council (sarcasm off)

In total, BSA councils have to pay $500M plus $150M note.  In the plan, they state some councils may not be able to come up with money and others may not be able to sell the property.. so they over planned a bit to ensure they hit $500M.  

In your council's case, they probably helped take the pressure off another council.

[Eagle1993 2160]

3 minutes ago, mrjohns2 said:

I assume if the council didn’t pledge the land, then they keep the excess as they are paying money. 
 

A more specific question is what happens to the excess of land was pledged and it greatly exceeds the estimate?
 

What if it undersells? 

The Property Contribution shall be structured as follows: The relevant Local Council shall agree to (a) retain title to the property (and pay insurance, property taxes, other associated ownership costs and any yet unremoved debt, all on a current basis), subject to, at the election, cost, and expense of the Settlement Trust, a mortgage in favor of the Settlement Trust, (b) post (and keep continuously posted unless otherwise agreed by the Settlement Trust) the property for sale within thirty days following the Effective Date with a qualified real estate broker that will use standard and customary marketing practices, (c) present any written sale offer to the Settlement Trust for approval, (d) present to the Settlement Trust for its review and approval all final proposed terms of any sale and purchase offers (including price, timing and other terms) (“Proposed Final Terms”); provided that if any Proposed Final Terms would impose additional costs on the Local Council and the Settlement Trust accepts such Proposed Final Terms, at the Local Council’s option any such additional costs shall be deducted from the proceeds or paid by the Settlement Trust, and not by the Local Council,5 (e) remit the proceeds of the sale to the Settlement Trust at closing net of posting/listing/marketing fees, escrow fees, sales commissions, and other typical costs of sale.6 The Settlement Trust may review the marketing and sales efforts undertaken by the Local Council and request that the Local Council make changes to such marketing and sales efforts as are appropriate and lawful; provided that any costs associated with such changes will be paid, at the option of the Local Council, by the Settlement Trust or out of the proceeds of any sale. If the Settlement Trust is unsatisfied with the sales and marketing effort, the Settlement Trust shall have the right to require the Local Council to promptly transfer the property to the Settlement Trust by quitclaim deed. If there is a shortfall or surplus of net proceeds as compared to Appraised Value, the Settlement Trust shall bear the risk of the shortfall and keep the surplus. If the property is not sold on or before the third anniversary of the Effective Date, the Local Council and the Settlement Trust each shall have the right to require the prompt transfer of the property to the Settlement Trust by quitclaim deed. If the Local Council receives a cash offer for the property the value of which is at least equal to its Appraised Value, the Settlement Trust shall accept the offer if no superior offer is made within thirty days (or, if a lesser time is specified in an offer received, then such lesser time) or accept a quitclaim deed for the property.

[Eagle94-A1 2687]

I  do not know who did the appraisals, but one camp they seriously undervalued. When I told folks how much the appraisal was for, they were extremely shocked because their nearby properties were a lot less land, and valued at a heck of a lot more.

When they listed the property, it was 5 times the appraisal price. And as i stated, the sale price was more than 10 times the appraisal price because of a bidding war.

[Eagle1993 2160]

6 hours ago, Eagle94-A1 said:

I  do not know who did the appraisals, but one camp they seriously undervalued. When I told folks how much the appraisal was for, they were extremely shocked because their nearby properties were a lot less land, and valued at a heck of a lot more.

When they listed the property, it was 5 times the appraisal price. And as i stated, the sale price was more than 10 times the appraisal price because of a bidding war.

I think you are going to see a more property sold than mentioned above.  Councils are property "rich" but cash poor.  I wonder if they just use this as an excuse to sell off a lot of camps and take the excess cash. 

In my council they sold their main camp even though it wasn't on this list.  Their "plan" was to invest in the other camp.  Limited investment so far but I have seen more council staff hired than I have in the last 10+ years ... and few are DEs.

[slocumscout 24]

As I understood things, the property contributions listed are only for properties that have been promised to the settlement trust; in other words, they are still to be sold. For Councils that have already sold properties (including mine) to settle their contribution, the proceeds of those sales will represent part or all of the listed cash contributions. 

To pick a random case that isn't my own council, Three Fires Council sold Camp Freeland Leslie after its 2021 season, and stated that was to pay their contribution to the trust. They show only a cash contribution and not a property contribution.

 

[Eagle1993 2160]

@slocumscout Yep, I think you are correct.

Also note, as of April 12 (if the date holds), the Trust takes ownership of the mineral rights & art work.  The head of the trust indicated one of their early jobs will be selling off those as well as they have to turn it into cash. How those are sold (in bundles, separately, auction, etc.) is TBD and the trust will find a partner to help sell those assets.  

[Eagle1993 2160]

This was mentioned in the Townhall, but the docket has been updated.

- There was a request into the District court to allow legal arguments to go beyond word limits when arguing about the stay (the judge denied that request ... he wants short filings)

- The judge ordered that all objections to the stay be filed by April 6th and any responses (and responses are not required) shall be filed 1 day later (by April 7th).

- The BSA filed a brief pushing back on the stay.  Several survivors also sent in objections to any stay.

e62a6865-915f-4d79-aa69-4118f2a9a64f_164.pdf (omniagentsolutions.com)

- The Insurance companies, D&V and Lujan submitted a response.  The insurers seem to be asking for a variety of stays ... if you don't like a long stay, 1 short stay or a short and medium stay would work as well.  Just please, please, please don't let this become effective April 12.

15940dca-6a44-458d-ad75-825f825ad427_174.pdf (omniagentsolutions.com)

Now we wait.  If the District court denies a stay we are down to the appeals court ordering a stay pending their review.  If they don't issue a stay, the plan becomes effective April 12th.  Then, the TCC disappears, the appeal will continue but likely be moot and the trust ramps up big time.  Post bankrupt BSA would emerge and who knows what is on the other side...

In terms of claimants, it sounds like they will need to be patient as it will be a while for the trust & claims process to get moving ... but at least it would be one big step closer to some sort of closure.

[Eagle1970 210]

Missouri House Bill 367, amending SoL for CSA from 10 years to age 55 AND adds a window.... Moving swiftly through the legislature.  From my understanding, this now proceeds to the House floor.

Actions

• Apr 04, 2023 | House
  • HCS Reported Do Pass (H) - AYES: 12 NOES: 0 PRESENT: 0
• Apr 03, 2023 | House
  • Executive Session Completed (H)
  • HCS Voted Do Pass (H)
• Feb 13, 2023 | House
  • Public Hearing Completed (H)
• Feb 02, 2023 | House
  • Referred: Judiciary(H)
• Jan 05, 2023 | House
  • Read Second Time (H)
• Jan 04, 2023 | House
  • Read First Time (H)

[SNEScouter 60]

On 4/7/2023 at 8:23 PM, Eagle1993 said:

Now we wait.  If the District court denies a stay we are down to the appeals court ordering a stay pending their review.  If they don't issue a stay, the plan becomes effective April 12th.  Then, the TCC disappears, the appeal will continue but likely be moot and the trust ramps up big time.  Post bankrupt BSA would emerge and who knows what is on the other side...

At the end of the insurer's reply brief, they said something interesting.  "Because their appellate rights are at risk, the Certain Insurers respectfully state that, absent a stay, notices of appeal will be filed no later than 12:00 pm ET on Monday, April 10, followed by an expedited stay relief request thereafter in the Third Circuit." 

Essentially, they are saying that because it is so time sensitive, they can't wait forever for Judge Andrews to rule on the stay requests.  Presumably this is headed for the Third Circuit today barring a ruling in the next few minutes/hours.  Of course it's anyone's guess how quickly the Third Circuit will act.....

[Eagle1993 2160]

7 minutes ago, SNEScouter said:

At the end of the insurer's reply brief, they said something interesting.  "Because their appellate rights are at risk, the Certain Insurers respectfully state that, absent a stay, notices of appeal will be filed no later than 12:00 pm ET on Monday, April 10, followed by an expedited stay relief request thereafter in the Third Circuit." 

Essentially, they are saying that because it is so time sensitive, they can't wait forever for Judge Andrews to rule on the stay requests.  Presumably this is headed for the Third Circuit today barring a ruling in the next few minutes/hours.  Of course it's anyone's guess how quickly the Third Circuit will act.....

There appears to be several different stay requests.  

• District Court stay ... basically, District Court would delay implementation of the plan until the appeals court rules.
• District Court temporarily stays ... District court would delay implementation of the plan until appeals court rules on a stay.
• Appeals court stay ... assuming District Court doesn't issue a stay, Appeals Court could issue a stay.  Perhaps they could make it temporary, not sure.

Based on the townhall, it seems like the 1st option above is very unlikely.  There seemed to be a bit of hedging if a temporary stay would be granted ... so there could be a week or two delay in plan effective date. I don't think that would be a shock based on the townhall.

The big unknown and perhaps big shock would be if the if the appeals court issues a stay until they rule.  If that occurs, we could be looking at a long delay (for example, it has been over a year waiting on the appeal ruling of Purdue Pharma).  Plan goes effective Wednesday if no action is taken.

 

[SNEScouter 60]

23 minutes ago, Eagle1993 said:

Based on the townhall, it seems like the 1st option above is very unlikely.  There seemed to be a bit of hedging if a temporary stay would be granted ... so there could be a week or two delay in plan effective date. I don't think that would be a shock based on the townhall.

The big unknown and perhaps big shock would be if the if the appeals court issues a stay until they rule.  If that occurs, we could be looking at a long delay (for example, it has been over a year waiting on the appeal ruling of Purdue Pharma).  Plan goes effective Wednesday if no action is taken.

It is not clear to me whether the plan will "go effective" on Wed. 4/12 if a request for a stay is pending to the Third Circuit but has not been ruled upon.  I thought David Moulton suggested at the Town Hall (but memory may be failing me) that even the mere pendency of a stay request would delay the effective date for a little while, even if no court has actually ordered a stay. That would make sense because by its terms, the plan cannot go effective while a stay request is pending unless all of the plan supporters & settling parties agree.  That's in Art. IX.B(1)(c) of the plan (a condition precedent to the effective date is that "no request for a stay of the occurrence of the Effective Date shall be pending").  All of the relevant parties would have to agree for the plan to "go effective" while a stay request is pending and that includes includes Hartford, Century, JP Morgan, etc.

In other words, the effective date will likely be delayed until the Third Circuit denies all stay requests, assuming that are eventually denied.  Of course, if it grants a stay (or if the District Court does), then the effective date will be delayed for a long time.

Edited April 10, 2023 by SNEScouter
error in original post

[Eagle1993 2160]

27 minutes ago, SNEScouter said:

That's in Art. IX.B(1)(c) of the plan (a condition precedent to the effective date is that "no request for a stay of the occurrence of the Effective Date shall be pending").

That makes sense.  In the town hall, there was some hedging about the April 12th date; however, then I question why there would be a request on District Court for the following:

Quote

The Court should grant a stay or, at minimum, a temporary stay to allow a reasonable time for emergency motions to be filed with and considered by the Third Circuit without the plan going effective. 

It seems like the individuals appealing believe this goes effective April 12th unless District Court acts, but you could definitely be correct that a stay request to the Appeals Court could push it day by day until answered.

 

[MYCVAStory 687]

7 hours ago, SNEScouter said:

In other words, the effective date will likely be delayed until the Third Circuit denies all stay requests, assuming that are eventually denied.  Of course, if it grants a stay (or if the District Court does), then the effective date will be delayed for a long time.

Well said.  There was also an automatic 14-day period after DC approval in the order so that takes it to the 12th.  Yes, the plan going "effective" is contingent on four things as written into the plan:  1.  Bankruptcy Court approvel (done), 2. District Court Approval (Done)., 3. No stays in place and 4. No motions to appeal in place.  So, we are waiting for a stay decision at the DC and if that fails then the Circuit can take up a stay while the motion to appeal is in place.  The hope for Survivors needs to be that the DC in the next day or two denies the stay.  Then, the Circuit Court grants a temporary stay of a few weeks.  That would provide a window for the plan to go effective.  Even better, the Circuit denies the Stay!  If the Circuit puts into place a permanent stay until the appeal is heard it could take, given the pace of appeals already docketed....wait for it....a year.  There are a lot of moving parts and "what-ifs" but the focus will next go to the Circuit Court if the Judge Andrews denies the Circuit stay as expected.  Keep your fingers crossed.

Edited April 10, 2023 by MYCVAStory

[SNEScouter 60]

Lots of movement in the District and Circuit Courts today.

First, Judge Andrews denied the stay motions.

In the Third Circuit, stay motions were filed by the Lujan & D&V claimants, and the Certain Insurers.  BSA & plan supporters filed opposition briefs almost immediately.

Later in the day, a single judge of the Third Circuit entered a temporary stay “… for the sole purpose of allowing the Court an opportunity to review the requests for a stay pending appeal. Nothing herein constitutes a ruling about the merits or a need for more than a temporary stay.”

Now we wait for the Third Circuit to rule on the stay requests in the coming days (weeks?).  If stay motions are denied, expect the plan to go effective & BSA to emerge from Chapter 11 shortly after.