MYCVAStory

Circuit has denied stay. Plan may now go effective!

Hearing Info for Wednesday, Docket 1113. Hearing essentially addresses substantial claim request for the Coalition and the effort to provide "startup" funds for the Trust. The startup funds would help demonstrate to the Circuit that work is underway. Interestingly, the BSA now is not a "movant." Disappointing but perhaps an attempt by the debtor not to seem too presumptuous to the Circuit. Fingers crossed Silverstein allows it. After years of waiting ANY effort to get some work done in a more timely manner would be a nice change. NOTICE OF AGENDA OF MATTERS SCHEDULED FOR HEARING ON APRIL 19, 2023, AT 10:00 A.M. EASTERN TIME This hearing will be conducted in-person. Any exceptions must be approved by Chambers. Parties may observe the hearing remotely by registering with the Zoom link below no later than April 19, 2023, at 8:00 a.m. Eastern Time. COURTCALL WILL NOT BE USED FOR THIS HEARING. Please use the following link to register for this hearing: https://debuscourts.zoomgov.com/meeting/register/vJIsfuqprDspHXdbRPTd0fYN_1ebjiD6sJ0 After registering your appearance by Zoom, you will receive a confirmation email containing information about joining the hearing. Topic: Boy Scouts of America Time: April 19, 2023, at 10:00 a.m. Eastern Time (US and Canada)

That website assumed ALL claims were credible and would be pursued. That article is the opinion of one attorney who from my observations has little to nothing to do with this bankruptcy. It reads at best like someone who scanned the DC opinion and just rehashed it. Ultimately, payments will come down to two things, the numerator and denominator. We know part of the numerator now, 2.6B. Additional monies will come through insurance settlements and litigation against non-settling insurers. The denominator will be determined by how many Survivors complete the questionnaire and have credible claims. The Bates numbers made assumptions for each. We'll know the denominator better after the deadline for the questionnaire passes AND THEN as the Trust starts reviewing claims. Until then, any of these "articles" have to be taken with a very big grain of salt.

The District Court's stay denial included more than the usual statement. It provides a bit of a roadmap and reasoning for the Circuit to say "makes sense to us" and deny a permanent stay pending appeal. When I asked a legal type how long it could take before the Circuit says something next the guess was 2-4 weeks. Not bad in the grand scheme of how long this has taken. Fingers still crossed.

Well said. There was also an automatic 14-day period after DC approval in the order so that takes it to the 12th. Yes, the plan going "effective" is contingent on four things as written into the plan: 1. Bankruptcy Court approvel (done), 2. District Court Approval (Done)., 3. No stays in place and 4. No motions to appeal in place. So, we are waiting for a stay decision at the DC and if that fails then the Circuit can take up a stay while the motion to appeal is in place. The hope for Survivors needs to be that the DC in the next day or two denies the stay. Then, the Circuit Court grants a temporary stay of a few weeks. That would provide a window for the plan to go effective. Even better, the Circuit denies the Stay! If the Circuit puts into place a permanent stay until the appeal is heard it could take, given the pace of appeals already docketed....wait for it....a year. There are a lot of moving parts and "what-ifs" but the focus will next go to the Circuit Court if the Judge Andrews denies the Circuit stay as expected. Keep your fingers crossed.

During the Town Hall last night the Coalition's attorney David Molton all but said that the District Court would NOT issue the stay. This prediction came about because the District requested supporter briefs very quickly, and objector replies the next day. In other words, the District just ruled and there were few cracks in the plan to expand an objection so why belabor the issue. "Get me your paperwork and I'll keep the "Denied" stamp inked up." This will then continue the rush to get enough into place so the Trust can go effective. Lots and lots of discussion of the steps/stages of all of this during the town hall. Link:

No, and this is supposed to be discussed at the Town Hall tonight. The Effective Date is when Judge Silverstein rules that everything is in place and the Trust may do its work completely. It's a "legal ruling." and what the objectors are trying to stop right now. BSA is trying to get the Effective Date work done by 4/12 according to one attorney's email. Fun fact....if a Trust goes effective and THEN a higher court rules that some portion of bankruptcy law should be interpreted a different way it does NOT impact the existing Trust. You can't "unscramble" the egg. So....everything right now is about getting an "Effective" order, or stopping it.

Page 166: H. Claim Determination Deferral. For a period of up to twelve (12) months from the Effective Date, and by an election exercised at the time of the Trust Claim Submission, Direct Abuse Claimants whose Direct Abuse Claims may be substantially reduced by the Scaling Factor described below in Article VIII.E.(iii) (statute of limitations defense) may elect to defer the determination of their Proposed Allowed Claim Amounts to see if statute of limitations revival legislation occurs, provided, however, that this claim determination deferral window shall close for all Direct Abuse Claims twelve (12) months from the Effective Date at which time such Submitted Abuse Claims shall be determined based on then applicable Scaling Factors.

Interesting. www.bsarestructering.org goes to a "site not found" message for me. Regardless, neither are very accurate! 🙂

I think this is the specific link: https://www.bsarestructuring.org/estimated-potential-payment-calculator/ BUT.....BUT.....this does NOT take into account any scaling factors that would increase or decrease awards and assumes that all claims can be funded at 100%. It's merely a simplified way to look at the matrix and apply it to open and closed States. I fear that this calculator and others that law firms have posted are setting expectations that are best guesses or worse, at best. The only way to truly get an idea of a claim "value" is to do a deep dive into Article VII (I believe), the TDP portion, in the plan. There's also a 50-minute video on the TCC site discussing this.

Just saw this Town Hall notice on the TCC website. Interesting, the TCC and Coalition doing it together. Some day this is going to make for a really boring book or a drama-filled miniseries. TOWN HALL: The Official Committee of Tort Claimants’ and the Coalition of Abused Scouts for Justice will hold a Town Hall Meeting on April 4, 2023 at 8:00 p.m. (ET). Zoom: https://pszjlaw.zoom.us/j/85281284960 (no registration required) One-Tap Mobile: +16694449171,,85281284960# Dial-In by Telephone: 1-888-788-009 (toll-free), Webinar ID: 852 8128 4960. If asked for a “Participant ID,” just press #

The plan calls for a "first in, first out" FIFO process. BUT, that won't impact the amount of your award or how much you get. The Trust will start processing claims and making some portion of award with an eye to making sure enough is available over time. At the same time they'll be negotiating/suing non-settling insurers for additional monies. Survivors can expect multiple distributions of checks as monies are available. Take a look at the Madoff Bankruptcy. While extreme, that Trust is up to its 14th distribution to some creditors: https://www.madofftrustee.com/distributions-16.html Let's hope the Trust has the right transparency and communication so Survivors have the right expectations as time passes.

It's going to be fascinating to see how this shakes out. A lot of focus, and rightfully so, is on the numerator; how much money is needed NOW. Well, the other side of this is the denominator; the number of Survivors that complete the questionnaire to get an award and the number that are credible. Some number less than 82,500 will be the denominator. How many have given up or won't go to the hassle of completing the questionnaire? How many will provide a convincing argument to support their claim? What will appropriate support be in the eyes of the Trust? Surely this will be more than listing a Council. How many more States will reform their SOLs before the process is over? That too impacts distributions. All of that is why the Trust will hire an economist to work on the forecasting and financial advisors to make the money stretch the furthest.

There will be significant work on a questionnaire to allow for claim processing and award designation. This will include input from the STAC and experts in mass tort claims as well as experts in assessing sexual abuse. The claim form was a first step. The next step will be to "get in line." Even the $3500 payment will require some degree of review to make sure there's enough credibility. There's a whole group of people out there who try to jump on every class action process just to see if no one's checking too closely. The $3500 requirement won't be extensive but it'll also require/remind claimants that it's a crime to lie about this. I know....potentially asking liars to say they aren't lying. Bottom line is that Survivors should be getting prepared to at some point make their best case and provide as much support as possible on the questionnaire. This is their "day in court."

As another said, it depends on "wrap-up." The immediate concern for Survivors and the BSA is getting the plan to the point where it "goes effective." Then, the BSA follows the plan monetary and non-monetary agreements, Trust moves ahead, entities start paying the money they owe, and legal action against non-settling insurers may commence. So the plan becoming effective can happen in a couple months, maybe less, but a LOT has to do with what the objectors do to prevent that. Full wrap-up, as in when the money is all gone and Trust dissolved.....well, remember that there will still be a "future Claims representative" for a very long time, and lawsuits against non-settling insurers complete with all that legal machination....it'll be years and years.

Mods.....Might be the right time to start a new topic such as "Post-District Court Affirmation" or similar?

Another question is how long until the plan goes effective and what needs to happen before then. A bankruptcy pro I spoke to today dumbed it down for me in a way I understood. This is a lot like closing on your house. You agree on a deal but now there's the sausage-making. You need an appraisal, insurance, termite inspection, flood certification, mortgage approval, title search....and set a closing date for a month or two down the road hoping you can get it all done by then. That's where we are. The Trustee needs to have in place all the infrastructure to start this "not-so-small business. That includes bank accounts, insurance, some professionals retained, and other parts of the backbone. There's also a promissory note as part of this on the BSA/LC end I believe that needs to be finalized. So, all of that gets put in place before the debtor says "Judge, here's the motion and proof showing we're good to go effective. Release the Kraken" (Kraken part is mine. I'm not so sure there's Latin for Kraken." This is "scrambling the egg" in bankruptcy terms to get things going as quickly as possible so possible appeal avenues feel the pressure of the impracticality of "unscrambling the egg." How long, a month or two if we're lucky and not massive impediments. Objectors, especially the insurers, will try to hold this up because that's what they do. But reading the District Court opinion it really puts the objectors on their heels and affirms strongly Judge Silverstein's opinion. Objectors look for small cracks to wedge themselves into. None were provided and while there's still battles ahead, for now Survivors who want this to move along should consider today at least a very good day. Tomorrow....that might be another story! Take victories where you can find them.

History fans are going to have a field day with this bankruptcy in hindsight. In the case of the TCC estimate, it was both early on in the bankruptcy and included expectations for all insurers and SOL relief. It should have been as high as possible at that point. Should it be higher now? Sure, but time will tell what percentage claims will be paid in the end. As well, it's important not to cherry-pick statements as the objectors did. The TCC didn't provide any expert testimony/evidence related to valuation at the plan confirmation hearing for one simple reason, the BSA, which the TCC and Coalition joined as plan supporters, provided it. The Judge also cited the expert opinion of Bates as convincing so that move was the right one. The TCC at the beginning of the process and when it objected to the first plan did its analysis then as objectors. Without it there would have been no valid basis to object and apply the needed pressure for increased LC or insurer contribution. When you become supporters you toss aside that which no longer serves you.

And the answer to what happens next.... Fist let's see how long it takes the insurers to file a stay.

It's really anyone's guess. The judge at the end of the hearing did acknowledge that he knew people were really waiting for a decision so that's a good thing. Some have suggested that he might want to wait for other decisions but that isn't normal behavior for District Court Judges in this situation. So....while no one in Wilmington expected the wait to be Silverstein-lengthy it's still hurry up and wait. It'll be six weeks on Thursday.

If you had "Positive Covid Test" in the pool for the next reason why things will be delayed, you won. Thursday's hearing has been postponed until April, the 19th I think, because Judge Silverstein has Covid. In all fairness, this is unrelated to the wait for the District Court decision but related to the Coalition's Substantial Contribution claim hearing in the morning and the hearing in the afternoon to get the Trust "seed funding" so some operations can start. Another month....

To be determined. There is a part of our population that will "sign up" for any mass claim action. It's sad: https://topclassactions.com/ Anyway, what the Trust will do to address this is TBD but at some point it has to decide how long it'll work on each $3500 before it isn't cost effective.

The claim form was only to make a claim and allowed the debtor to get a better picture of where the abuse occurred, severity, etc. In mass tort bankruptcy Trusts there will be a questionnaire that will ask for a ton more detail, any medical records, evidence, etc. The trust will need to hire professionals with experience in developing this form for sexual assault, then retain professionals to process all of them and wade through the materials.... It's going to be difficult for many Survivors but the closest comparison would be the discovery phase of a trial. Hopefully the Trust will communicate well with Survivors on instructions and processes. If a Survivor retained an attorney they are going to find out quickly how much help that attorney is going to be. Remember as well that Judge Silverstein dictated that she needs to approve the fraud prevention steps the trust will follow. Be on the lookout for attorneys who scream "we need to get money into the hands of Survivors as quickly as possible." If I'm getting 40% then I'd want the same. If you're a Survivor you want awards going to CREDIBLE claims. The tricky part for the Trust, and why the questionnaire is the first critical step is because at some point it's going to take too long and cost too much money to validate a claim. The Trust needs to balance speed and validation. Sorry, probably more than just an answer to what questionnaire construction is.

Just to be clear, the only thing being proposed to the court is the start of the "administrative side" of the Trust. This is so that Judge Houser can start working (she has already accrued hours) and start to put in place the professionals that will provide the infrastructure for claims management, questionnaire construction, money management, independent review and all the rest. There will still be significant delays but at least if the plan and Trust go active at some point then some legwork will have given it a bit of a head start.

Clif notes..... BSA is trying to start scrambling the egg so that the certain insurers and other objectors can say "Look court/judge, this is up and operating and the prep is underway so that awards can be made when the Trust is funded. Can't unscramble the egg now" That's important pressure and VERY good news for Survivors because if this doesn't get dragged out the time-to-awards will be shortened compared to everything administrative waiting for a start when all appeals have run out. Interesting.....motion is for BSA to contribute 1 million dollars and TCC's attorneys PSZJ to contribute 2.9 to 3.2 million. The PSZJ money is coming from the 10% of its fees it pledged at the start of the Bankruptcy to go to the Trust and has been kept in escrow until now. Oh, and the Coalition's attorneys Brown-Rudnick....support for this motion but NO financial contribution. What a shame. Their hearing to receive a 25 million dollar "substantial contribution" from the BSA was pushed to March. Seems like a missed opportunity to pledge 2.5 million and show the Judge its level of commitment and contribution. You know, you always find out who your friends are when the check comes and it's time to split it. The people who really care about you always reach for their wallets. The others see the check approaching and head for the bathroom.