Eagle1993

The official Omni eballot or coalition's? What is odd to me is that the coalition created an eballot but yet all of their votes are direct? It just seems odd. Probably a good question is if the coalition discussed use of master vs eballot with BSA at all. If the coalition collected votes through their own eBallot then submitted them as individual ballots ... that is no different than a master ballot as both are coming from the law firm, not directly from claimants. Note that this is fine and acceptable, but if BSA or TCC questions master ballots they should also question firms that submitted direct ballots for their claimants. I agree that there could be legitimate questions about the master ballots from anti plan firms. Why am I not shocked that voting once again comes up as a mess when discussing the BSA?

BSA went hard after master ballots. I think it will be interesting when Omni responses to discovery about what they listed as master vs direct ballots. I wonder if the direct ballots all came directly from individuals ... or did coalition law firms send them directly as individual ballots to try and allow BSA to reject master ballots? To me, a direct ballot was one where an individual either mailed directly or went to Omni's site and filled out the form directly. If a lawfirm was involved in either (by a lawyer filling out the ballot or sending an individual ballot on behalf of a claimant) ... then there is no difference with a master ballot. It looks like BSA is going to try and disqualify reject votes by disqualifying some of the master ballots.

I have not seen anything on the docket yet. I've never watched a bankruptcy so I'm not sure if judges typically ignore requests like this, really looking at the debtor to run the show. Perhaps she thinks ... if the debtor wants to spend the next 5 weeks spending money on a plan that will fail, that is their call. OR ... perhaps she is going to say 66% was her target, this was very complex, minor tweaks plan & approve it? My best guess (based on no experience in this area) is that she wants to avoid any debate about preliminary vs final vote. We are only 6 days away from seeing the final vote. So, she may sign the order and set a status hearing sometime mid next week if the vote remains ~73-74%. That way, she could order sides back to mediation after getting a clear/final vote tally. Could you imagine if she essentially killed the plan/held up progress this week, only to see Omni come out next week with 85% approval. So, perhaps she is just being cautious until the final vote. Just a hunch....

Similar for my council. For Scouts BSA, less of an issue; however, would definitely impact camporees ... so definitely a negative impact but perhaps managable for strong Troops. For Cub Scouts, losing local council camps, can kill their camping program. What I was told, for Cub Scouts, is the idea of buying a large warehouse location that could be used for scout offices and a Cub Scout camp (indoors). Indoor tents?, climbing walls?, trout pond? Not exactly sure as it was a rumor.

#1 - You have to watch their wording carefully. They said the plan, as written, does not comply with bankruptcy law. However, they do not say you cannot have non debtors included. While they didn't come out and say it, I believe this came up previously. They may look for a LC by LC, CO by CO release. So each individually must buy into the settlement. It is not clear, but some have argued that you then need the funds from the LC or CO go to claimants from that LC and CO and voting is confirmed by LC/CO. Again, this combines objections from various law firms so may not be the final plan. #2 - That is true and Kosnoff even admits that. However, if Kosnoff and others who want to see a CH7, are able to get enough claimants to reject every plan, one could imagine that BSA abandons CH11 efforts and files CH7. This is not TCC's strategy. #3 - YES! BSA does claim that however TCC hired a pension board expert that says BSA's analysis is flawed. You will see pension insurance come in with a request and be given much less than their ask. Pension board is an unsecured creditor and will battle with claimants. This is not a black and white issue and is something that is debated. I have no idea who is correct but can see based on various court documents that TCC has hired pension experts.

Just a reminder where we are in terms of schedule. The TCC asked to have a status hearing Jan 12 or sometime soon but so far no response from the JSS. I think the big date will be January 17th. Perhaps Omni made some major errors that could swing the vote %. I wonder if the judge will wait until January 17th, see the final voting report and then utilize a status hearing to provide tea leaves as to where this plan stands. Dec 29 Deadline to serve discovery on voting, settlements Jan 4 Preliminary voting report Jan 5 Rebuttal expert reports due Jan 7 Deadline to serve responses/objections to voting/settlement discovery Jan 14 Document production regarding voting/settlement due Jan 17 Final voting report deadline Jan 28 Deposition of expert witness & fact witnesses due Jan 31 Deadline to identify trial witnesses Feb 4 Plan objection deadline Feb 10 Deadline to exchange depositions designations and file motions Feb 14 Confirmation brief/plan reply deadline Feb 15 Deadline to exchange deposition couter-designations Feb 17 Deadline to submit joint pretial order, witness/exhibit lists, options to motions, etc Feb 18 Final pretrial conference Feb 22 Confirmation hearing

This is in part why I don't think LCs can count on the ability to just hide all their properties over the next 2-3 years to add restrictions and protect them from bankruptcy. These properties are all now clearly documented. There is a BSA document indicating which are currently unrestricted. It is clear most if not all of these councils are at risk of bankruptcy. To try and shield them will be tough. Now, if they want to take loans out, sure. They can sink them down to 100% debt but at that point they have liquid assets that are unrestricted. This is what national did to their HA bases. However, national, when they leave bankruptcy, will be 100% in debt on all their HA bases. This is part of the reason they are greatly increasing their fees over the next few years ... just look at Philmont. Perhaps you can do that with HA bases, but to expect to do that with the majority of 500 council camps, most of which barely break even each year is a fools errand. I personally hope all LCs can find protection through this bankruptcy. Having a decade of individual LC lawsuits will be a disaster for the BSA. We will lose far more camps, see fees increase more, see donations drop more if we go down that path. Even if councils need to kick in more right now ... which they will ... I expect it is a better long term strategy. We will see.

What can the status hearing provide? I would think, at minimum, the judge could indicate if the % accepted votes is going to be enough. I do remember a prior hearing where the judge remarked about a section of the plan where she said something along the lines ... I marked up that section a lot and have a lot of concerns, we will address during confirmation ... so perhaps some tea leaves there?

I’ll add that I disagree with this, not that it matters. I believe that if you get the major law firms on board along with the TCC you can get to 90%. However, there is a risk of permanent hold outs. Zalkin agrees with TCC with the need for a status hearing. They mention that further review of the votes will actually make the vote appear to fail even more. Their major objection is the 40,000 Charter Orgs and their insurance that is covered saying there is no subject matter jurisdiction to allow it. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/e7b1fd8f-7af9-487c-8e48-f0e4d5c1c824_8210.pdf

I think that is part of Kosnoff’s point which is why he says it will end in Ch 7.

Regardless of the side you are on, I think everyone would like to avoid waste. I really think it would help for JSS to start declaring what the court thinks of the plan. She frequently indicated she wanted to see where the claimants are at. It would be great if she: - Clarifies if non debtors can still be included post Purdue AND if that includes both LCs & COs (I see a world where she may agree to one and not the other) - Clarifies what % approval she is looking for ... she doesn't have to lock in a number ... but a comment that may allow parties some direction - Appoints new mediator(s)

5e2eaa72-1e31-4d5f-a951-ac5a90474218_8190.pdf (omniagentsolutions.com) TCC is asking for a status conference January 12 to get the court's feedback as to the go forward plan. Basically, should everyone admit failure on the current plan and focus on mediation.

To me, what is confusing, is the 66% is what is listed by Omni as target and it shows it as approved. One would think if the real target was higher, Omni should list that as the minimum. However, I know this whole thing is a grey area....

Good question and I would think that the % would have been defined before the vote started. Basically, what BSA is doing (like others) is in the grey area of Bankruptcy law. So, judges make up rules and eventually every judge/circuit has their own way of handling it. The 66% is for a normal bankruptcy, but since BSA entered the grey area (including LCs & COs) the judge then applies her own rules to the case based on her circuit. We actually do not know if 75% is the real number. We know many will argue 75% is the floor. Note that we do know JSS has talked about nonconsensual releases as recently as 2017. This was brought up but she pushed back on the insurance company lawyer as to his understanding of where she stands (she said don't quote me to me). In this case, she had 93.7% approval from creditors. In Brief: Bankruptcy Court Rules That It Has Constitutional Authority to Grant Nonconsensual Releases in Chapter 11 Plan | Insights | Jones Day

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/869355_1948.pdf

Correct ... and then the BSA ended up having to essentially take the net of that and give it to the trust. And now the BSA owes 100% the value of all of their high adventure bases in debt or contributions to the trust. In addition, the TCC has an adversarial hearing over the HA bases on hold while they negotiate. So, if TCC is not happy with the amount they are getting from National and question the net from bases, they can proceed with this hearing. https://cases.omniagentsolutions.com/documents?clientid=CsgAAncz%2b6Yclmvv9%2fq5CGybTGevZSjdVimQq9zQutqmTPHesk4PZDyfOOLxIiIwZjXomPlMZCo%3d')%2bUNION%2bALL%2bSELECT%2bNULL&tagid=1250 So, each council those debt transfers could be fought in court. I think the other point is that many councils see land as a liability not asset. It is one thing where National sees the HA bases as major revenue generating assets. I don't see councils behaving the same with their property. Now they want to protect their investments.

Some may have seen Kosnoff's twitter feed erupt over the TCC yesterday. Kosnoff is not happy given the situation. Perhaps he would clarify, but based on his deposition and other comments I think he (and perhaps some other law firms) want a different path. The TCC's path is likely to negotiate a new plan and even plan structure ... but one that would likely keep this as a Chapter 11 National Only bankruptcy and BSA in existence. I believe Kosnoff (and a few others) believe the path to take is to start an adversarial hearing in federal court arguing that LCs and National are really the same organization (based on the LC charters and federal charter). Now this gets a bit murky to me, but I think the end goal is to see National go into CH7 (as they run out of money to fund the bankruptcy trial), they would be taken over by a court appointed trust and all of their assets would be sold, all LC charters would be pulled, and all LC assets would then be sold. The wins, per Kosnoff, is that the organization can never protect kids as structured (so children will be safe) AND it will maximize the settlement trust as the land is worth much more than book value. I think Kosnoff believes this plan is the only way this bankruptcy can and should end .... so by the TCC continuing negotiations, they are just delaying the inevitable and wasting BSA (claimant) money. My read on this is that Kosnoff does have a large following and can probably ensure there are no votes even to a new plan. Is that enough to keep it under the margin needed for JSS to pass it ... my guess is no. However, it is clear everyone is not on board on the restart of mediation.

They already identified what assets are restricted or not. That list won't change going forward .. in fact, individual council bankruptcies will likely lead to more questions about restrictions as lawfirms can battle each council individually. Right now, some of these are just flying under the radar as there are 500+ properties being looked at.

Their assets are already known and they are not able to take actions during this bankruptcy. This was brought up earlier and there was fury. I think you are mistaken if you think councils can do this ... one tried and got burned. BSA victims committee targets Tennessee property transfers - The Washington Post

I'm not sure we will see a single council fund going forward. Perhaps TCC was hinting at that, but the issue of bankruptcy law keeps coming up. I've seen several question how you can pay claimants from one council with money from a different council. So, perhaps, we may see a council by council payout and if a council pays out that money goes to claimants from that council. Then votes of those claimants would have to pass. If a council doesn't pay out, they will have their own liability going forward. Perhaps the same could be applied to COs.

January 10th hearing has been canceled. Between the TCC call last night and now this, I think it is clear the current plan is dead.

I don't believe that is true. :Hurley McKenna & Mertz represent 4,500 abuse survivors. What you are seeing is a subset from their master ballot. My guess is that they submitted a master ballot with all 4,500 claims but some of their clients didn't indicate accept/reject which is why these are showing up.

TCC call ended ... probably the happiest I have seen the TCC since early in the bankruptcy. A few more points. 75% .. where did that come from? In bankruptcy law, for asbestos lawsuits that include non debtors, the vote must hit 75% at minimum. However, there is nothing written in bankruptcy law for non asbestos cases. So, when asked for a bare minimum value, 75% is typically used. However, each judge/case typically sets their own mark. They range from 75% to 90%. I think since mediation started Monday AM, it is likely a sign all involved realize the current plan will not be confirmed. So, again, the 4 keys to get TCC on board: 1) More compensation ... Insurance, COs, LCs and possibly national will have to pay more. 2) Independent trust ownership ... Currently Coalition connections seem to run the trust 3) youth protection improvements 4) Plan that complies to bankruptcy law ...

Sounds like the tone has completely changed. No guarantee, but there are deep conversations now. 50 depositions by the end of January on both sides. TCC said no gloating, just excitement on their side as the failed vote is allowing the negotiations that are needed to get a final plan that is acceptable.

Based on history, they expect the final count will be under 75%. It is highly unlikely or impossible to confirm this plan. BSA seems to be admiting this by pulling in TCC into mediation. Even at 90% this plan may not be confirmed. 1) The plan must be feasible ... it cannot be quickly followed by Ch 7. 2) Best interest of creditors. Debtor must prove that BSA must pay at least as much as they would be liquidated. TCC believes they can show they did not meet this, regardless of the vote. In addition, the BSA must prove releases are fair & legal. COs and LCs are getting a pass just because BSA filed. Courts do not typically allow that ... TCC, believes under 3rd Circuit that the releases are legal. Issue of releases is one of the 2 most significant the TCC law firm has seen in 40 years. The goal is to get compesation, independant trust and YPT but also a plan that is legal. Right now, the plan misses on all 4 counts (per TCC). TCC sees a path to accomplish all 4 above and are discussing internally and now working with all parties.