MYCVAStory

I think it's important for everyone to understand that it isn't a case where a class of claimants approves a plan, or even a judge crams down a plan, and everyone heads home since it's a done deal. The reality is that a lot of deal-making can still occur in anticipation of the judge saying "here are the flaws" and parties serving notice what they will object to. Yes, it's completely illogical that a flawed plan would go out to vote but bankruptcy works that way and sees the plan not as a final agreement but a framework for hammering out a deal pre-confirmation. It's why she keeps saying "This isn't a disclosure issue, it's a confirmation issue." Another coming attraction: Multiply the number of professionals on this call times the number of hours times the average hourly rate.... This month's request for compensation from the parties should be jaw-dropping.

It also points to the fact that she isn't going to break any new ground and will stay extremely close to precedent while seeking to minimize conflict-of-interest and other issues that I agree will see this appealed. A lot of what is happening today are attorneys having their say so that they can lay that groundwork for later. It's also why a LOT of bankruptcy gets hammered home well after a vote....when the real deal-making happens.

His comments were wrapped around the issue, and he challenged the debtor attorney on this, exactly what can survivors expect in the way of settlements? The judge seems unwilling to have a disclosure statement that lays this out?! Of note....the judge commenting earlier that she is "new to mass tort bankruptcy." Wow. That should really make victims feel comfortable.

Hand-picked by the Coalition. So...control the Trust...pick the Trustee in charge of distributing the money.....

Yep. But if you're the coalition it's all part of the game plan. Collect as many clients as you can. Fight strict validation. Control the trust. Don't communicate with your clients because you don't want to answer the tough questions, and settle QUICKLY. Why? Because for every billion in an award fund the coalition attorneys stand to earn before paying off their funders 400 MILLION DOLLARS. Oh, and the last part of the plan....move on to the next mass tort and repeat. This isn't an anti-lawyer post. It's a "how the game is played" post.

That won't happen. The TCC will include its recommendation in any packet.

The Judge's fixation on the Local Council's was unexpected. Third-party releases are quite the concern nowadays. We should all remember that this was a DISCLOSURE hearing and nothing more. Can a judge approve disclosure for a faulty plan that has legal issues? Yes. THOSE are decided at a later date. I know. Illogical.

The reality is that this is for the benefit of the JUDGE. No one is assuming (correctly) that she is abreast of the issues. As well, she had a 12-hour hearing yesterday. So, this is the "sausage-making" part of bankruptcy. The devil is in the details and when a plan is going to get considered it is ALL details. We need to remember as well that there are professionals representing groups like the TCC and Coalition as well as members of those groups. Some of the members have precious little experience in bankruptcy court and unfortunately like to prove it sometimes!

Well, between that argument and the fact that a mediator didn't sign the last mediation report it tells you a lot about how well mediation went and how the Coalition and BSA have become strange bedfellows.

That number is self-proclaimed by the Coalition and the BSA uses it to its benefit. Stang just went there...the Coalition wants this over because it stands to gain $400 million plus from settlements.

Well, it just might be closer to 13.8% and explain why the TCC is saying "enough is enough" and coming out swinging. OK, for the data-geeks, a VERY deep dive on this gives additional perspective from a friendly accountant looking over my shoulder. His comment: The percentages in the summary appear to be mathematically correct based on the amounts reported by the BSA; however, it is important to remember that amounts reported in Exhibit 1 for “Land Buildings & Equipment” are book value. As a result, in most (if not all) cases the percentages calculated in the summary you shared are artificially high / inflated because book value is generally lower than current market value / appraised value. For instance, in the case of Greater New York Council (#640) (which admittedly is likely the most extreme example), the calculated percentage of “contribution to total net assets” is 43.05% ($9,000,000 / $20,904,468). However, the balance sheet information for GNYC in Exhibit 1 reports “Land Buildings & Equipment” at $5,630,537. This amount is obviously well below the appraised values for the three primary GNYC camps and results in an artificially high percentage of 43.05%. 640 GREATER NEW YORK 20,904,468 43.05% As a result, the summary is informative but also somewhat misleading because it gives more credit to the Local Councils than they deserve. I understand that the conclusion of whoever prepared the summary was that Local Councils were only contributing 17% of their total net assets (which is offensive), but that percentage is still too high. In order to make a quick and dirty adjustment for appraised values, we can use the Local Council liquidation analysis (Disclosure Statement PDF Page 306), which uses appraised values for those properties that were valued by CBRE, JLL and Keen. If you take total assets of $4,011,716,000 reported in the Local Council liquidation analysis and back off liabilities of $234,198,591 (PDF Page 333), you get total net assets of $3,777,517,409. Using total Local Council Contributions of $519,588,542 as reported on Exhibit C, you get a total percentage of 13.8% ($519,588,542 / $3,777,517,409). While the overall difference between 17% and 13.8% is not massive, certain individual local councils (e.g. GNYC) come off looking much better than they should. One additional thing to keep in mind. Exhibit 1 shows total net assets of $3,303,228,450 as of February 2021 (PDF Page 333). Based on a review of June 2021 balance sheet data, total Local Council net assets have increased by approximately $80 million to $3,382,300,795. In other words, Local Councils certainly appear to be in an even better position in June 2021 than they were in February 2021.

No, the TCC has said that officially it is "agnostic" regarding the future of the BSA. What it wants is what's best for victims. If that means the BSA survives because it has restructured its finances and operations appropriately, or not, is secondary to the goal of getting the maximum compensation for victims.

Link?

Thank you for capturing this. It's CRITICALLY important for this plan to see the light of day and the court allow victims to decide. The more the BSA and Coalition object the more you know it's going to be a better option for victims!

They tried to play nice and make it work. The Coalition overplayed its hand and now must hope, and the BSA too, that this judge doesn't care a thing about victims. The US Trustee's opinion will be interesting.

Yep. the TCC knew this was coming. Now we'll see a group that might care about ALL victims. Worth noting why the Coalition just might think the BSA plan is a good one. The lawyers that are a part of the Coalition GET REIMBURSED 10.5 MILLION DOLLARS to pay their attorneys. PLUS almost a million a month until this is done. That's money that could have gone to victims everyone. The portion below.... 19. Payment of Coalition Restructuring Expenses On or as soon as reasonably practicable after the Effective Date, Reorganized BSA shall reimburse state court counsel for amounts they have paid to the Coalition Professionals for, and/or pay the Coalition Professionals for amounts payable by state court counsel but not yet paid to Coalition Professionals for, reasonable, documented, and contractual professional advisory fees and expenses incurred by the Coalition Professionals (the “Coalition Restructuring Expenses”) from the Coalition’s inception up to and including the Effective Date, up to a maximum amount equal to (a) $950,000 per month for the period from August 16, 2021 up to and including the Effective Date (pro-rated for any partial month), plus (b) $10,500,000 So....Hartford gets off lighter and drops its administratvive claim...Coalition takes less than it should but its bills get paid... THAT'S why the TCC is saying "Enough is enough."

I think I hear wayyyy off in the distance the TCC's planes getting closer and closer to dropping a load of objections and motions onto the court. I'm still guessing it's by the close of business today. Whether that's the COB east coast or west coast is the question but they had to expect this and be prepared for this plan to be filed.

Perhaps. But if the TCC files a motion it will be interesting to see the law cited. This judge does like to follow precedent.

A hearing can be requested prior to 30 days. It may make sense to end exclusivity quickly before people start believing all the "Settlement reached" headlines for a plan not supported.

Hmmmm....since it was my suggestion that the TCC just might file a motion to end plan exclusivity so it can file its own plan I'll see your rare OA flap and raise you a rusted metal kneckerchief slide and that sweaty "Guardian Angels" red beret we had to wear for a while 🙂

If the TCC files a motion to end plan exclusivity, right after any new plan is announced, it's pretty much guaranteed that it has its own plan locked and loaded to be filed as soon as the judge accepts its motion.

Of course! But like my mother always said "Consider the source."

It's fair to Absolutely. Anticipate the next BSA plan soon if history holds to form. Then we'll see if the Coalition signs on to get its bills paid since the judge said "nice try." Then...a good barometer of whether this is as much as mediation could produce, or not, is whether the TCC signs on too or says "NO WAY" and signals its plan is on its way.

Or...remember that the TCC can motion to have its own plan considered. Considering that the BSA panicked and got itself involved with a BAD Hartford deal that no one likes, and now hasn't figured out how to get out of it without an administrative fee penalty, the TCC may be eyeing its own plan that meets the best interest test in the eyes of the court.

Were you sitting with Kosnoff and watching the same Town Hall?! PLEASE, either wait for the transcript or re-watch it at https://www.dropbox.com/s/7i01h4syy3vtgpb/BSA Town Hall 9-9-21.mp4?dl=0 and provide us with the actual words that bring you to this conclusion. FYI, NO ONE named "Chambers" was part of this meeting. The TCC has NOT said that anything is being accepted as stands and has stated that it will continue to fight as best as it can. They could have said "this is a done deal" but there wasn't a whiff of that. As far as the non-monetery, they brought up the IV files and reiterated that they are committed to having them become public. As far as the $3500, they have also made clear that this may be an option for those who want out but NO ONE would be required to take it. We're all entitled to our opinion but you were really watching a different meeting.