Eagle1993

The DOJ is objecting to the plan. They haven't withdrawn the objection they have had since an earlier version of the plan ... as none of the versions address their concern. Note this objection was filed May 10, 2021. They object to the 3rd party releases. Yes, the judge can still approve the plan with the DOJ objection, it is a major issue. I found this comment interesting: https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/241d24f2-4d85-482f-a433-da28b3f8ce3e_3581.pdf

TCC Townhall Summary. No major announcements. No change to recommendation. Vote, vote, vote. More details below: Purdue Ruling ... could have major impact, still digesting Voting ... pushing everyone to vote. They recommend reject, but want everyone to vote. Votes can be submitted/changed until Dec 28. If claimants are concerned about their vote, call or email Omni. Best to email as Omni will reply back with how their vote is recorded. That could then be used as evidence later if needed. Council dashboards ... this data is just a new format to show data that is already in the disclosure package and agreed upon by all parties. The TCC believes they may be able to release their analysis of every council (which is based on data shared by councils that may not be public). However, they cannot release this until the plan confirmation fight where this data may then be brought up in court. So, for now, the dashboards are limited. Century offer ... TCC believes once again that this is far less than their total liability. No change/impact to their recommendation. YPT ... BSA has started meetings with TCC about youth protection changes. The conversations were good and promising. Main issue is transparency. We will have to see what comes out. BSA offer ... TCC has not been able to confirm the full details of the BSA/LC offer increase to protect all COs outside UMC/Catholic church. That said, as I mentioned earlier, their estimates align fairly closely to my numbers in an earlier post. They openly asked the BSA to meet with them to discuss and confirm if this is a correct understanding. TCC was upset by some statements during the Coalition townhall about fees. Technically, the TCC is the 9 abuse survivors who are not paid. They make the call on if the offer is acceptable or not.

Prof. Jacoby @melissabjacoby on Twitter has a good analysis of the Purdue ruling yesterday. In addition, there are a large number of articles out (Reuters goes in a bit deeper as does WSJ). Based on those and comments from the TCC town hall.. The Purdue ruling will be appealed AND it is in a different circuit .... so it sounds like no immediate direct impact to the BSA case; however, the case still could be influenced as bankruptcy courts watch each other and this appears to be a major deep ruling (142 pages) that reference prior supreme court rulings that greatly limits bankruptcy court to follow the law Note that supreme court ruling comes from Jevic (2017) Bankruptcy law does not include non-debtor releases. This was added due to a ruling in one case and now it caught on like wildfire. The appeals court states ... right now, just because bankruptcy law does not include language you can't have non-debtor releases doesn't mean you can. Bankruptcy law is meant for bankruptcies. However, it has expanded now to the point it is replacing state court litigation. This was never the intent. Just recently, think of BSA, USOC, Johnson & Johnson, Purdue Pharma, etc. From the various articles, it looks like this is headed (eventually) to the Supreme Court. The question is ... can bankruptcy court replace state courts for non-debtors. There is nothing in bankruptcy law that allows this. So, the question for the BSA case. I wonder if there is any chance a plan is approved with DOJ/TCC rejecting the plan. That seems like it would be ripe for appeal. BSA should be ready with a plan of a BSA only exit.

TCC agrees with the estimate I had …. BSA will likely only start paying the $100M around 2035 (note payments stop 2036).

TCC talking about Purdue. BSA case is in the 3rd Circuit while Purdue is in 2nd. However, the judge addresses topics that apply to the BSA bankruptcy. There may or may not have some impacts. TBD…

Note that the issues are different in the BSA case in that there are questionable conduct by the Owners prior to filing. That said, I still find the various bankruptcy cases interesting as they are a bit ahead of BSA’s and may give us an indication of the hurdles left ahead.

Purdue Pharma bankruptcy has been overturned on appeal. https://www.wsj.com/articles/judge-overturns-4-5-billion-settlement-between-purdue-pharma-sacklers-11639698359 Issue was allowing releases of shareholders under a company bankruptcy. Bankruptcy code does not authorize such non-consensual non-debtor releases. Voting ... 95% of the 120,000 plus votes were in favor of the plan ... and it still lost on appeal.

There is some sort of formula we will probably never see. I expect it includes net unrestricted assets, claims, perhaps SOL vs outside SOL, etc. They had some sort of formula. The TCC, right now, does not show in these filings what they think the council can pay. We do know, that on mass, they believe in order for their liability to be discharged through bankruptcy it should be closer to triple their prior offer. In the end, I doubt the judge is going to discharge liability against thousands of organizations with this much churn in claimants. Perhaps if DOJ, TCC and everyone was on board, she would give it a green light. I just don't see it ... the Purdue pharma is getting enough bad press and that was much less far reaching. I can already hear her saying .... While there is a path to allow the discharge of non debtors, the bar to clear is incredibly high. While I understand the debtor's position, and the potential impact to their business plan, I just cannot accept a plan that discharges liability without the complete and total support of all parties. We are not there. I would ask the debtors to go back and determine if this is the path they would like to continue ... or if they need to change their strategy. ... Unless there is a major change ... I think this ends with a BSA only plan. Perhaps the TCC can save it by offering an LC by LC buyout, but the price may be too high for most councils. Time will tell ... but the faces of all involved appear grim.

Hearing now scheduled December 21. Will cover emergency request from some insurers to delay schedule. I believe their request is by 4 weeks minimum. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/5db0af36-3dca-44b2-968e-c9821b875e9a_7783.pdf

At first appearance, it looks like the BSA, the BSA local councils, the Coalition and the future claimants committee struck a deal that IF there is a deal with the Methodist and/or Catholic church The Methodist and Catholic church must help BSA fundraise They must support scouting growth through 2036 Any fundraising dollars would reduce the amount BSA would have to pay to the settlement in terms of the $100M note At least that is the way I read it ... but it is an odd footnote. My ONLY guess is that there is concern the Methodist/Catholics pay off a settlement, flee the BSA and then membership collapses and some of the payments based on membership collapse. So, this footnote is there to indicate there is agreement that the Methodist/Catholics must also guarantee support for scouting through 2036 if they are going to get protection via bankruptcy. I noticed they didn't say the Methodist/Catholic committee agreed to this footnote.

Actually, I relooked at this. It appears that this deal above is for all Charter Organizations, EXCEPT the UMC, the Roman Catholic Church and the LDS. So, NO DEAL for the UMC or Catholic Church; however, a deal for every other CO. The agreement also has this footnote. It would be interesting to understand what this really means.

Looks like just the high level look per council, not the detailed report. But progress.

I think you may see those within SOL and with good state counsel see much higher payouts if this plan fails. They will be able to sue COs and LCs in state court and go after those entities + their insurance companies. Right now, CO's insurance is completely protected in this plan with no payments required. That is a big deal. They would be brought in if this plan fails ... which is a major concern of COs. LCs ... I really think this is a case by case basis. Some LCs are contributing very small dollar amounts in terms of % of their assets. Even 1 lawsuit that hits them would result in more money going to victims than what they are offering today. I do agree with you that other LCs are/have contributed a large portion and lawsuits would likely mean less money for victims. Its tough for me to judge the net result if it is positive/negative to claimants. I do question, even more than LCs, the insurance settlements. They likely believe the vast majority of the claims are false ... OR ... are not represented by counsel willing to sue in state court. In the end, I actually believe AVA is correct that the plan approval really depends on the claimant's situtation. Some individuals .. .this plan probably means the highest payout. If you are outside the SOL and in a state unlikely to change SOL you may not see a big increase in future plans. However, if you are inside the SOL and/or in a state willing to change SOL you may see a huge potential upside if you reject the plan. Good lawyers would be sitting with each claimant to discuss Their motivation ... is it to maximize their personal financial outcome. Is it to cause as much damage to BSA as possible? Is it to ensure YPT is improved? Why did they sue and what is their goal? The current status of the plan and how it relates to their goals. Depending on the above two, then provide them a recommendation on object/approve. I feel these law firms who are sending mass requests to either reject/approve the plan are not serving their clients. It is incredibly sad. As a lawyer, if you want to collect the 40%, you should personally know your client and represent them. Otherwise, don't take the case.

Various updates today. I didn't attend hearing as was working. - AIG said there is no way to hold current schedule, min delay of 4 weeks required. Discovery not nearly complete. - TCC is indicating that voting may need to restart due to substancial changes via settlement mid vote. - DOJ is stating that vote is almost certainly required and will need to be clearly told what % of the settlement is now based on the growth of scouting. (Note that a lot of new settlements are based on scouting growth). - TCC is indicating they will be seeking discovery into mediation, specifically about how a mediator got his name on the plan. - Sounds like the judge is not going to require AIS to send an email as she doesn't have authority. She can disqualify lawyers ... - BSA lawyers are saying any further delay will result in less money for survivors. I somewhat question that as National BSA is only making up $106M of the $2.6B pot ... so even if they contribute nothing, it is a small percentage now. Probably better to get it correct than quickly rush to a solution.

To me, the biggest question is how UMC and Catholic Church are let off with a payment of $15M from BSA. This seems to say that there is almost nothing expected from other COs. I don't expect the $2.458B to grow much more. Yes, there is upside to ~$2.8B and there are a few other insurance companies out there, but the big ones are in. Lets say $2.6B total. Remove LDS, remove FCR payment you get just about $2B. Lets assume half of the claimants take $3500. That removes ~$150M so you come down to about $1.8B. Remove trustee fees (lets assume 10%) which is probably optimistic, you drop to $1.6M. The remaining claimants will average $39K each. Now ... where is more money. Some LCs have more, some are tapped out. COs, outside of LDS, have not contributed anything. Insurance perhaps. National is tapped out unless someone can go after the JP Morgan loan. It seems like progress has slowed, so we are probably in holding until confirmation.

My guess below. This whole thing seems a bit like a hail mary (for the insurance companies, LCs and COs). I think National could exit fairly quickly ... but the foundation of the program would be at risk given LC/CO future liability. A ton of questions remain, confirmation will get to them. From National BSA ... they are out of money. The only money left would be selling their properties and then go after the JP Morgan loan (basically saying it isn't secured). That could be a tough fight. So, the only way they can provide more payments is loans and future payments. If this was a National only situation, I wonder if these future payments would even be offered (probably not). National is probably doing this to reduce burden on LCs and Charter Orgs. Note that the future payments must still show they are financially viable, which is why they are tied to their business plan. Basically, minimal payments if they are within their plan. Major payments if they go over (as they are viable if they at least reach their plan number of scouts). Local Councils ... as they are not in bankruptcy, as you stated, they can offer whatever they want that is accepted. So, I expect they are balancing between immediate payments and future loan payments.

So, with this, the guaranteed payments are: $106M from BSA in terms of property/cash (after removing payments to Coalition, etc.) $500M from local councils in cash/properties $250M from LDS (for LDS claimants only) $787M from Hartford (note for Hartford, this will not be an immediate payment and has some risk) $800M from Century $15M from LCs (for 2 charter org buyouts) $2.458M Total ... not 100% up front, but heavily I believe $400M+ is pulled out for future claimants (have to check again) and payments will also go to trust leaders Also ... $250M is for LDS claimants only. Then there is $80M Note from BSA with $4.5M payment per year + payments per number of scouts $100M Note from Councils $125M Loan/payment from BSA/Councils (really heavily dependent on big increase in membership)

In the updated agreement, there was a footnote that participating charter orgs, ad hoc committee (local councils), coalition, FCR will work together to identify youth protection changes. No details.

Ok ... a bit odd but would be good to see what others think. $100M ... based on payments above, ignoring everything else. BSA's current business plan page 376 below https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/2e1a8c44-7812-46a0-8a93-5aa5621dc7b2_6431.pdf says they hit 1,010,000 scouts by 2025 and projects 5.5% growth rate after. So, it would take until 2034 to exceed 1,500,000 scouts. If everything works out, this $100M offer is really the following: $2.5M offer in 2034 $5.4M in 2035 $8.5M in 2036 This is per the BSA plan. Now, if BSA grows a lot more, sure, this could hit $100M. But per BSA's current plans, that $100M would only hit $16M and in the mid 2030s.

Here are payment terms on the $100M. Note ... councils and charter orgs will need to agree to YPT changes. The BSA has agreed to pay to the Settlement Trust an annual variable payment, commencing the year after the BSA Settlement Trust Note is paid in full and the BSA’s total outstanding debt under the JP Morgan facilitie up to a cap of $100 million Payment must be complete by 2036 or $100M is met. So, there $100M is the maximum they would pay and if membership grown remains under that, they stop paying fees in 2036. The BSA expects to be paying down the JP Morgan loan ... note that once they complete they payment to the settlement trust, they believe their debt to JP Morgan and the Foundation will be less than $225 million. That still seems high. Local councils will pay 25% of the payments. Payments will be 50% of $72 paid by youth member in Scouts BSA/Cub Scouts each year in excess of 1,500,000 members. 50% of $45 paid adult in excess of 500,000 volunteer Note that per BSA growth plans, this payment would start until well past 2025. There is a chance this $100M becomes $0 if membership never exceeds 1,500,000 again.

Ok, a bit more info. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/086fbe27-7a3d-4f42-9a19-383482f8c997_7745.pdf It looks like BSA's increase of $140M ($15M cash from LCs, $25M Loan from LCs and a $100M loan from BSA/LCs based on membership numbers). This payment would release the UMC and Roman Catholic Church from all liabilities.

So… what does this mean. #1 - I think we will see one of the more entertaining and lively members of each hearing (Tancred Schiavoni) exit stage right. Century will now want to get out of the way to allow this plan to pass. #2 - I am highly suspicious of the language about the $100M added as it contains a reference to COs. LDS offered $240M … is BSA looking to buy out all CO liability with $100M linked to membership numbers? That needs more info. If it simply a bump up from BSA and LCs that is real movement. #3 - The $40M adder from LCs seems pretty small, unless combined with the $100M above. I doubt it makes a difference with the DOJ or TCC so I question why offer it. Overall, the biggest win for the BSA is they keep Tanc from delaying nearly every hearing. That is a win for BSA and the Coalition: I bet the TCC and DOJ still object the proposal. The coalition will try to get everyone to switch to yes now. However, they didn’t double the offer as they alluded to on a call. I have no idea where this ends, but I think we still have a long road ahead.

More information coming. I’m not sure if the $100M more from LC and BSA is contingent on releasing COs. As reflected in the Century and Chubb Companies Term Sheet, the Parties have also agreed to an additional contribution from the BSA and Local Councils on behalf of Chartered Organizations, which consists of: which consists of: (i) an additional $40 million contribution to the Settlement Trust, made up of an additional $15 million contribution from the Local Councils (in addition to the $500 million current cash and property contributions under the Fifth Amended Plan) and an increase of the DST Note from $100 to $125 million; and (ii) an additional payment of up to $100 million from the BSA and Local Councils attributable to growth in BSA membership over the coming years on account of Chartered Organizations’ continued sponsorship of Scouting units. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/4ad6b793-5040-43fa-8ab6-0c4a1ed44f18_7741.pdf

Rumors that local councils have increased their offer by $40M and Century settlement is in at $800M. https://www.cbsnews.com/news/boy-scouts-america-bankruptcy-sex-abuse-settlement/

Looks like there is a deal being finalized now. Insurance came through late and the US Olympic committee added $34M. https://www.wsj.com/articles/nassar-victims-reach-380-million-settlement-with-usa-gymnastics-and-u-s-olympic-and-paralympic-committee-11639406377 Note that these increases came in after 95% approved the deal ... so even with that large approval, these updates were seen as necessary for confirmation of the plan. Also note that the Dept. Of Justice was objecting to the release of the USOPC ... which helped force the updated deal. Unfortunately for the BSA ... I don't see them hitting 95%. They also have objections from the DOJ in releasing COs and LCs. Seeing how hard it was to get the gymnastics' deal done (which was far simpler) I am not yet optimistic for the BSA. The only good news is that deals can close. (I guess technically this isn't closed, but the story is there is agreement).