MYCVAStory

Vegas odds say the next one will be Wednesday 6/30. Stand by.

Well, here's more than you probably want to know below. I'd guess that the attorneys representing a majority of claimants and have been involved with mediation would say that they are making a substantial contribution by getting to a settlement that the majority would vote for. Please don't make me explain the thinking of attorneys beyond that! It IS something that is objected to but the cost of the objection could add the fees if the objection didn't prevail. At any rate, here's the code in part from: https://www.jonesday.com/en/insights/2012/06/construing-substantial-contribution-under-section-503b3d Administrative-Expense Priority for Making a "Substantial Contribution" Section 503(b)(3)(D) of the Bankruptcy Code grants administrative-expense priority for the "actual, necessary expenses" incurred by a creditor, among other entities, in making a "substantial contribution" in a case under chapter 11. In addition, section 503(b)(4) of the Bankruptcy Code grants administrative-expense priority for "reasonable compensation for professional services rendered by an attorney . . . of an entity whose expense is allowable under" section 503(b)(3)(D) and "reimbursement for actual, necessary expenses incurred by such attorney." As explained by the AmFin court, these provisions are an "accommodation between the two objectives of encouraging meaningful creditor participation in the reorganization process and keeping administrative expenses and fees at a minimum to maximize the estate for creditors." The Bankruptcy Code neither defines "substantial contribution" nor sets forth criteria to be used in determining whether a substantial contribution has been made in a chapter 11 case. The issue, therefore, of whether a creditor has made a "substantial contribution" is a question of fact, with the moving party bearing the burden of proof. Most courts narrowly construe what constitutes a "substantial contribution" in a chapter 11 case, and most have taken the position that substantial-contribution claims, like other section 503(b) claims, should be strictly limited. The principal test is that there must be actual and demonstrable benefit to the estate and creditors.

In bankruptcy proceedings it is not uncommon for recognized mediation parties to "bargain in" certain fees as a part of a settlement. The code actually allows for reimbursement of fees if substantial contribution to achieving a settlement by a party can be demonstrated in the eyes of the court. If all parties agree then the court will usually allow it. Ahhhh....the business of bankruptcy.... I think saying the BSA "bought" votes is over-reaching however and would require not only the TCC and Federal Bankruptcy Trustee to look the other way but all other parties who would have to agree to not file an objection. The BSA couldn't deliver that. If you have a young son/daughter interested in law school have a conversation with them that starts like this..."You know, I've heard bankruptcy attorneys get paid pretty well at a certain level...."

An excellent question. Here's my guess. This is about to become ALL about the insurance and I wouldn't place my money on the Hartford "deal" (or better said Insult to Victims) even lasting too much longer. So, how then to get the insurance companies to settle? Well, that's where the trust comes in. There are cases that are "slam dunks." Horrible acts of abuse, States with viable SOLs, complaints about the abuser that weren't pursued, you get the idea. If the Trust allows them to go forward and the insurers start to get judgements against them they have to pay. If they pay enough then it becomes more advantageous to settle. EVERYTHING in insurance is Time Value of Money. Does this mean that every victim will be able to tell the trust "no thanks" and go pursue their own cases? No. The Trust is responsible for managing this process and against which insurers so that some will quickly realize it isn't worth it. Does it also mean that those cases that go out to apply pressure will wipe out the available insurance proceeds for everyone else? No, the Trust would more than likely negotiate terms ahead of time. Will this take time? Yep. The insurers will put up defenses and even try to settle before making a more "global" offer. At some point though the dam breaks for them and they want out. Welcome to the business of bankruptcy. It takes time. I'm sure the TCC knows that victims want to know what's coming next. Waiting to see if it announces a Town Hall meeting this week at TCCBSA.COM

Exactly. Full Stop.

Your points are excellent and feelings understandable. The very sad fact of this whole situation is that the BSA has put all victims into a bankruptcy process and not a justice process. This has been about business and not justice and for many that hurts the most. One thing to consider is that the TCC has mentioned that as part of this there will be "non-monetery issues" to address after the dollar amounts have been settled upon. The TCC has specifically said that as a part of the BSA restructuring it is focused upon the IV Files so that abusers are known and not able to be a part of other youth-serving organizations, and changes to the BSA Youth Protection program. Given tat the TCC is made up of nine victims I'd be surprised if they have forgotten about these issues.

Just a comment or two, the BSA plan is a "placeholder" that it needed to file to stay in synch with the court docket and make progress toward bankruptcy emergence. Don't assume it's the product of wide-scale agreements. Like past plans, the other parties will now comment and object or support all or parts. While he has a large number of victims as clients, Kosnoff is not a mediation party. If the TCC wanted to accomplish a global settlement with all the insurers by now it could have, at fractions of pennies on the dollar. If a plan transfers the insurance policies to a Trust it puts the trust in charge of litigating to maximize all insurance proceeds it can on behalf of victims. The fact that the TCC and Coalition aren't speaking suggests that they are working closely. If the past holds form, now that the BSA has filed a plan the TCC may schedule its next Town Hall soon.

We'll all have to be careful about the "headlines" when they appear after some sort of deal has been struck. This has a LOT of nuances but the media will take some amount, divide it by 82-85,000 victims and the sum will become the headline "BSA settles with Victims, Each to receive X." It's so much more complex. The funding that goes into any trust will come from not only the BSA/LCs but also COs and INSURERS. The insurers don't seem interested in a global settlement TODAY and won't roll over easily or quickly until they must. A LOT of the TCC's work right now must be wrapped up in the construction of all the processes that will continue after the BSA emerges. Then, it becomes a balancing act of gaining funds in a timely manner and avoiding an unnecessary litigation circus. We should actually be heartened that the TCC isn't feeding into any media feeding frenzy to make its points. This is billions of dollars at play and playing cards VERY close to the vest is a lot better than mistakenly allowing someone a peek because you said too much. That said, it IS agonizing for all victims and hopes are so easily dashed. Anyone who has lived in a State where every year legislation to change Statutes of Limitations never made it out of committee knows the pain when hopes are dashed. Victims, whether they consider themselves survivors or on the road to survivorship are some of the strongest people on the planet. If the insurers believe this is a group that will roll over easily then it will be a Trust's duty after it takes the baton from the TCC and Coalition to make it clear that the insurers may be grossly underestimating the fight and resolve of this group. Remember, "Justice delayed is justice denied." If only this was about justice. Alas, it isn't, it's bankruptcy so it's business. The BSA made that choice for all victims when it filed.

And for now, that means the BSA is the responsible party for having/filing a confirmable plan. If it wants out of bankruptcy on the schedule it already communicated then perhaps a plan will be filed in the next day or two.

It's probably pretty safe to assume that to a certain extent "No news is good news." This is the largest bankruptcy related to sexual abuse in history. Factor in CO's, LC's, future claimants, and the largest piece of the equation the insurers and the complexity is great. Every victim had hopes for the parties with financial exposure to be lining up checkbook in hand. That quickly vanished. So now it's a lot of sweating the details and everyone should all be reminded that if it's a BSA-only or BSA and LC-only settlement then the litigation against insurers will continue for potentially a long time since time is on their side. Welcome to the bankruptcy process. As well, welcome to the speed of the judicial process. Even those victims in States that were statute-friendly would be seeing their cases crawling through covid-impacted courts. So for many this process that's crawling along will still result in faster resolution or any sort of resolution at all if the abuse occurred in a statute unfriendly State. The TCC has reluctantly reminded claimants that this is "business" and wishes it weren't so. Safe to assume that the lack of updates and hearings means there's some sort of progress. For victims waiting for any sort of resolution after decades of hopes on hold it's understandably hard to be patient. Here's to better days soon.

The TCC has stated that it fully expects to have a statement included in any packet related to a vote. This is pretty standard bankruptcy procedure. I would assume that it will make its position well known and available for viewing as well. Remember though that in cases of this size victim attorneys often vote on behalf of their clients since they represent them and it's the client's responsibility to cast his/her vote separately or in consultation with the attorney if represented.

I spoke a little too soon. The TCC Town Hall meeting Thursday has been postponed. Given the mediation and court date ongoing/upcoming it's probably safe to assume that there's enough in flux for the TCC to wait until there's something more definite to report.

In case you don't have anything to do Thursday night, a reminder from the TCCBSA.COM website: NOTICE OF VIRTUAL TOWN HALL MEETINGS HOSTED BY THE OFFICIAL COMMITTEE OF BOY SCOUT ABUSE SURVIVORS The next TCC Town Hall will be held on Thursday, June 10, 2021, at 5pm PDT/8pm EDT. Zoom link: https://pszjlaw.zoom.us/j/87519715926 (no registration required) or Join by phone: 888-788-0099, meeting id 875 1971 5926 To be discussed: Status of Boy Scouts disclosure statement Status of negotiations with the Boy Scouts, local councils, chartered organizations, and insurers Other motions pending before the bankruptcy court The plan confirmation process

FYI, add another State to the list of those that are opening "Windows" for lawsuits to proceed: https://katv.com/news/local/arkansas-law-to-benefit-sexual-abuse-cases-against-boy-scouts-of-america This is why Councils in States where there's no legal path forward for victims at the moment should be fighting hard for a permanent injunction and not play the "it doesn't apply to me so why should I have to pay" game. In discussion for a long time, Louisiana was used as a State where the laws would NEVER change. Well, not so much and now 1,350 BSA claimants, if they are 21-55 have a litigation path if a permanent injunction is nor a part of any agreement. Tick-tock States where the laws are still prohibitive.

I beg you not to think this way. "Mass Tort" cases and especially those involving bankruptcy can take a long time to sort out. That is the case with this one and when you consider that the impacts were often mostly psychological the process of "vetting" claims will be significant and possibly time-consuming. In similar cases like asbestos there were "off ramps" so that people who wanted to resolve this quickly could do so. But, that came at a significantly lower award. Again, that may work for some but to maximize your award these cases take time and often include several rounds of awards as monies become available. Take a look at Asbestos and Madoff as examples of cases that were "settled" but then award processes were time-consuming. The award process SHOULD be intensive. so that every victim knows that every effort was taken to weed out any bad claims. My advice, live your life as you have have and want and only after you have cash in hand make plans otherwise.

That's basically correct but it doesn't matter. It included the sum of all values on artwork. The artwork, which is made up of Rockwells and a lot of other artists has MAJOR issues. First, any time you dump a lot of an artist on the market you decrease the value because of the increased supply. If you hold it off the market and sell gradually then you incur storage and selling fees. The best solution is to sell it all to one collector. The problem then is that it will be at a significant discount. Oh, and the value of Rockwells, right now as you can imagine they are declining if there's a significant Boy Scout component because they are "tainted" by all of this. So, cash is king and realistic valuations on artwork, leases, and potentially camps is queen. Apologies for the misogyny.

While it is of great concern to many on this forum, and for obvious yet different reasons, the BSA and LC assets are only one piece of the pie and probably the smallest. The biggest is the insurers. Claimants will have to consider the "whole" pie.

Remember, attorneys hate the courtroom because of the unpredictability. A continuance may only mean "We don't need you right now Judge."

There's an old saying, "Friends are people who hate the same people." How ironic it would be if one of the best things the BSA has done for survivors to this point is try to stonewall both groups representing those survivors and in so doing bring those groups closer and their demands higher due to the new-found unity.

Absolutely not true. As I understand and have full confidence in its validity, The TCC's professionals and State court counsels have been in Chicago, TCC present via Zoom. All have been fully participating along with other mediation parties and will tomorrow as well. Beyond the court date Friday if it occurs the TCC has a regularly scheduled Town Hall meeting next Thursday to update survivors and interested parties. Link will be posted at TCCBSA.COM

Perhaps with the hearing scheduled to resume on Monday, a lot of business pending, and with the Judge imploring the parties to continue negotiating, that this is an opportunity for that to happen via more mediation next week and the hearing continued to a later date. That's a win-win if anything comes out of it and lets the judge avoid an exclusivity decision until the BSA gets one last shot to find some agreements...or not.

Please remember that the "Local Council" data field was one of the most frequently left blank on the proof of claim form. Those not in scouting for long or the abuse happened long ago have found it difficult to recall what Council they were in at the time. As well, the proof of claim form was intended to be a "placeholder" if you will with the expectation being that there would be opportunity and demand for more validating information prior to any award determination. The TCC has said repeatedly that it advocates for a robust validation plan and on that single item it is in full agreement with the insurers. Every Council, especially those in areas where there was higher than average transient populations, should expect their number of claims to increase. Should attorneys have done more digging to determine the Council? Perhaps but for many that don't understand scouting and the mergers and eliminations of Councils it wasn't easy. Again, the inclusion of the local council was not required at time of filing because of the expectation that there would be time for amendment and additional data requested. So, 39,177 claims had unknown/missing local council data. Expect EVERY council's number of claims to increase. Data is found at the TCCBSA.COM website.

FYI, this was already scheduled to continue to next Monday to address everything on the agenda.

"Debated" is certainly correct. But all good debates should rely upon facts. The TCC in its most recent objection below addressed the whole threat of the Pension being taken over by the PBGC and shed some light on its actual state. It also hired its own professionals who focus on pension plan administration in bankruptcies. If victims suspect that the BSA is using its "pension plan" as a place to place assets that should be used to address victim compensation they have good reason to feel that way. See below: vii. The Disclosure Statement Does Not Contain Adequate Information Regarding the Pension Plans 79. The Disclosure Statement does not provide any meaningful information regarding the Boy Scouts’ pension obligations other than describing a standard separation of the Settlement Trust from the Pension Plan: “The Settlement Trust shall not have any liability to any Person on account of the Pension Plan, including liability as a member of a “Controlled Group” as defined in 29 U.S.C. § 1301(a)(14)(A) or on any other basis whatsoever.” 80. The Disclosure Statement should disclose that the Boy Scouts’ Retirement Plan (the “Retirement Plan”) is currently overfunded – about $86 million overfunded as of February 1, 2021, according to Willis Towers Watson (the Retirement Plan’s Enrolled Actuary). The primary drivers of the overfunded position are:  Better than expected historical investment returns.  Conservative funding of the Retirement Plan, including a voluntary $60 million contribution made by the Boy Scouts in two instalments (April and May of 2019).  The full freezing of the Retirement Plan effective August of 2020, which eliminated any future accruals of benefits under the Retirement Plan. 81. The Retirement Plan liabilities are currently discounted at the gross expected rate of return on assets (6.5%). Based on the Enrolled Actuary’s best estimate of future plan experience (as certified annually in the Schedule SB of Form 5500, filed with the IRS), no future contributions are expected to be required. If, in the aggregate, actuarial assumptions are met going forward, the plan’s overfunding is expected to grow modestly over time from the current level of ~$86 million. 82. The Boy Scouts have implemented a new Retirement Contribution Policy for itself and the Local Councils, set at 12% of payroll effective February 1, 2021. After paying for administrative expenses and the matching contribution in the 401(k) plan, the Boy Scouts intend to contribute the residual amount into the Retirement Plan, which is estimated be more than $25 million annually from the Boy Scouts and Local Councils. If this approach is followed, the Retirement Plan overfunding is expected to grow to $264 million by 2026 and $500 million by 2031, per Willis Towers Watson, the Boy Scouts’ own Enrolled Actuary. The overfunding cannot be used for any purpose other than paying retirement benefits, PBGC premiums and certain Plan-related administrative expenses. 83. The liquidation analysis further provides that “[u]nder a chapter 7 liquidation, moreover, it is likely that the BSA’s defined benefit pension plan would be terminated and the Pension Benefit Guarantee Corporation (the “PBGC”) would pursue its Claim of approximately $1.1 billion against all members of the controlled group, which are jointly and severally liable for such amounts and include the Related Non-Debtor Entities. The Boy Scouts expect that under section 4068(a) of ERISA, the PBGC would successfully assert a lien arising as of the termination date against each member of the controlled group in an amount not to exceed 30% of the “collective net worth” of all members of the controlled group combined. 84. However, for any member of the controlled group that has filed for bankruptcy prior to the termination, the automatic stay will generally prevent perfection of any lien under ERISA. The PBGC’s claim could therefore be asserted jointly and severally against each member of the controlled group in the full amount of the approximately $1.1 billion claim, provided that the PBGC’s claim, to the extent not secured by a lien under ERISA, would likely be treated as a general unsecured claim. The Liquidation Analysis assumes that the lien on Related Non-Debtor Entity assets would represent 30% of Liquidation Proceeds remaining for the Boy Scouts and Related Non-Debtor Entities combined after wind down costs and secured debt, if any. 85. Under a chapter 7 liquidation, it is extremely unlikely that the Boy Scouts’ Retirement Plan would be terminated because there is no reason to do so. As described above, the Retirement Plan is fully funded on an ongoing basis, it has no current contribution requirements, and there is potentially a large body of sponsors (the Local Councils) who could assume the Retirement Plan in the Boy Scouts’ absence. The Tort Claimants’ Committee is not aware of any precedent for the PBGC involuntarily terminating a plan under such circumstances. 86. In sum, the Boy Scouts are attempting to use the pension as a way to shield cash that can otherwise be used to pay the claims of childhood sexual abuse survivors. Over the next five years, the Boy Scouts project that more than $25 million will be contributed each year for the next five years towards the Retirement Plan when any such contribution is wholly unnecessary. The Disclosure Statement and the Liquidation analysis fail to adequately disclose the foregoing.

These are anticipated to be transmitted on Thursday. My understanding is that there was a delay to insure that a process was in place to guarantee that they would be received by local councils.