Eagle1993

BSA must have made their insurance payment in February. Unrestricted liquidity dropped to $118M. Note that $66M of that is a retirement fund ... so in reality, they have $52M left in the bank. When they started the bankruptcy, they had $115M in the bank and they also burned through 100% of an endowment of $54M. BSA will contribute some of that $52M to the settlement trust. BSA's liquidity remained flat until June ... July & August sees pretty big negative cash flows, probably on the order of $30M or so. I think BSA, if they leave bankruptcy by end of April should leave with about $30M in cash in the bank. SO.... around September, BSA will be out of cash. That assumes the bankruptcy goes through as planned. Recruiting helps in Sept - Jan + BSA should be a bit better off as they won't be paying big bankruptcy fees. So they probably won't hit $0 in Sept ... but could be close. f4a81bfa-d54b-4da2-b599-945c95d1997f_9538.pdf (omniagentsolutions.com)

Dumas sees the TCJC issue as unique vs other non-debtor releases and judge stated she agreed. I thought that was a bit of an interesting point. I'll be surprised if it holds to this week ... I expect it will spill into next week but we will see. The judge has been willing to go very late (near 7PM eastern) in non stop hearings with little time for breaks. Court with definitely patient with Pro Se claimants. However, I expect it will be a bit of cat hurding to keep it to 1.5 hours. The judge will have a difficult job of keeping Pro Se claimants on track. I'm sure many if not most are not experienced court, clearly have a very emotional aspect of their involvement and may see this as their last time to get their pain/suffering acknowledged. Each Pro Se, I believe, only has 10 mins. I know there are other avenues for victims to be involved (National and council boards, etc.) but I expect many will see this time as one to get their voice in front of the court/national BSA.

US DOJ is going to make significant argument about 9019 issues & 3rd part releases.

All times Eastern BSA has various charts that summarize all of the objections that will help to structure the closing arguments Status hearing 10AM Today A lot of discussions around scheduling each day. Attempting to keep to two days, hard to see that holding.

Does anyone have the schedule of hearings this week? I know they discussed a status hearing today and then closing arguments (I think starting with YPT and moving on to various other topics/groups).

We lost several units but I still think some of this is Covid hangover. I expect everything will be back to normal this fall. It will be important for BSA to be ready to rebound then.

One interesting argument near the end of the hearing today was about the Archbishop of Agana. They object to the plan but have never shown up in court. The Guam committee lawyer went on and on about how the Archbishop still objections and has not withdrawn their objection (Guam is a different group). The judge said fine, but if they don't show up it doesn't matter. I'll have questions about the objection and who am I supposed to ask. It looks like the Archbishop just filed a renewed objection but honestly, I wonder if they plan to show up. I think closing will really be critical. My understanding is that the judge will be asking a lot of questions. Depending on those questions and how they are answered to her satisfaction, we may get a sense where this is headed. For those with more experience .... what are the judges options? I assume accept or reject are clearly two options. However, can she modify the plan or line item veto it?

Judge ... concerned over TDPs. Her gut says there are issues. She is asking what is the point of the TDPs and how they were created. She said her gut may be wrong ... but that will be important. Wondering ... whether she has any truly contested facts or how the facts are applied. For example ... what does it mean to emulate the tort system. Everyone agrees with the discovery tools available in tort ... that doesn't seem contested. She would like it pointed out if there are contested facts.

Let her claimants talk. She seems to talk as much as them sometimes. There are other times where she seems to accidently stumble on a good point only to just keep going. I think she likely made a mistake not taking the 2019 offer and she does seem to deeply care about her claimants. They have been waiting since 2018 .. ouch. For those not watching, Tanc (Century Insurance Lawyer) does seem to have placed his laptop in a dresser and about 1/2 his video is obstructed. Very odd look. I think a small number of claimants may be better off with no plan. However, the vast majority will likely see less money and the BSA may fail. I am hopeful. I think the judge wants to see this plan pass. I have listened to probably 20% of the hearings, so I missed many of the judge's comments. Now ... if this plan fails, I think the only answer left is a BSA only cramdown (toggle plan). I don't see any path that includes COs & LCs other than this plan. That will leave peanuts for most claimants. Many lessons for future cases ... perhaps the court should have kicked BSA out of bankruptcy until they were truly bankrupt.

That seemed damaging a bit. They went over his past objections to the plan and how most were not addressed. I still think she approves; however, the neutral path and some council contributions are the areas that seem weak points if the judge raises concerns.

Court begins at 1 Eastern today. I think Guam and a few others have witnesses.

Interesting ... judge continued to sustain objections over the coalition lawyer; however, when his questioning wrapped up the judge went back to him and apologized for being curt (I don't think she was) and said she made some notes that he brought up some good points early in cross and suggested he expand on those during closing arguments. Again, I don't think these witnesses are helping the certain insurers...

5 minutes on debating the definition of the word "voluntary" GIven the fees being charged, that probably cost the BSA $250,000.

The BSA lawyer is using the settling insurer witness to actually make a stronger case for the plan. I do not understand attacking the TDPs. They have to get through 82,000 claims. The TDPs seem very well written to handle that. If anything, one could see more arguments from claimants. I don't understand why the settling insurers think they have a winner there. Then ... instead of finding experts in TDPs and trusts, they pull in people who have no clue how TDPs or trusts are supposed to work. I still think the neutral path has more liability (as there is no max, there is no money to pay for the results, insurance companies could claim it is not insurance neutral plus claimants have to pay a ton to go down that path). However, it seems like the insurers are simply stuck on the TDPs. My only thought ... settling insurers may say ... most of these claims deserve $0. The reaming have more than enough $ already in the trust. The only reason the trust needs more money is due to bad TDPs. Therefore, fix the TDPs and eliminate the $3500 payment then you don't need any money or neutral path from the non settling insurers. I just don't see this working, but who knows, I'm not a lawyer.

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.

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).

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 ...

Follow the rules. I understand there are cases that are tough calls. For example, we were at summer camp in a major storm (lightening not wind) that came on fast in the middle of the night. We stayed in our tents and didn't evacuate as the path to evacuate was likely more dangerous than the area we were already in. There are cases where you are out on high adventure trips where you make the best call you can. The case described here isn't that ... let them walk 250 feet and seek shelter. I don't understand why they wouldn't.

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... 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.

This is a good point. There are processes in place, just not a 6 hour psychologist evaluation for every claimant. I think a very valid point raised by BSA .... the trust is able to determine what process to follow on a case by case basis. They have the flexibility to require that 6 hour interview if they felt it was necessary .... it just doesn't mandate what she is recommending. I don't see much coming from her testimony.

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).

Interesting. Insurers brought up Thorpe Insulation bankruptcy where the non settling insurers won an appeal. Basically ... if a plan isn't insurance neutral they can distrupt it even late in the process.

I think that only applies once district court would approve, but would be good if someone could confirm. There have been many recent examples where district court has rejected non debtor releases. I tend to agree though, if district court approves, there may be limited groups appealing.

On cross the insurance witness struggled a bit to explain how the TDPs or expedited payment negatively impacts them. However, I think they make a decent case on the neutral path. There is no limit. Plus, in their contract, insurance companies should have assistance of the insured to investigate the incident. That seems to be non existent in the neutral path plus there isn't much involvement of insurance. Now, they will get a bill and told take it or leave it. The issue is that if they go to court then, then are concerned that the bill will be looked at as binding. The Judge and DOJ had raised issues about the neutral path. I think the insurance companies are raising some valid concerns regarding this path as well. Now, I think it could be fixed (perhaps by lowering the fee AND allowing insurance companies to participate during the process). We will see...

I expect many trusts are built upon future insurance settlements. I would have thought this part was standard language. I wouldn't be surprised if there is an update to the plan that clarifies insurance rights for non settling insurers. I would be surprised in the insurance side leads to major delays, even though I do think insurance may be landing some good points today. The big issue, where it could lead to major delays, is district court and the non debtor releases. I think we will see the bankruptcy court approve the plan in April (unless something shocking comes up). Then, we may know by June where district court lands on this case. If they approve ... then I expect further appeals are likely moot and the plan will go forward. If they reject ... well, I have no idea where this goes. Just my guesses ... but April/June are probably key dates coming up. Now, when payments will be made (other than those $3500 quick payouts) ... I have no idea. That could take a while as they need to setup the TDP/neutral review process & collect payments from parties. I think we are definitely closer to the end than the beginning.