Chapter 11 announced

[ThenNow]

2 hours ago, T2Eagle said:

In order for BSA to demonstrate that two thirds of its assets are restricted and unavailable to creditors they would need to have been incredibly disciplined in their accounting and bookkeeping over the past century to make sure there was no comingling of the various funds and properties.

The TCC's Complaint for Declaratory Judgement on the allegedly restricted assets has this at the heart of their contention. "The Debtors' History of Commingling Assets" is the leadoff hitter.

Edited March 5, 2021 by ThenNow

[Eagle1993]

15 minutes ago, T2Eagle said:

I live in Ohio.  For something like the VRA to pass would take a massive change in the political landscape.  Just a few years ago we tightened SOL rules for even basic contract cases.  For a state like Texas the shift would have to be even larger.

Texas agree for now, but that can change in 10 - 15 years.

All you need is a case where someone raped a bunch of kids, was known by the institution but nothing can be done due to SOL (ie, they came forward at 21).  The public will scream and legislation will pass.  

There are some pretty Republican states that have SOL reform passed, so it is not necessarily a R vs D discussion.  When the discussion is nebulous, it is easier to ignore and see this as trial lawyers vs great institutions.  Once you have real names, stories and a pretty big instance of negligence, the pitch forks will come out.  If I were an LC, I would look to get out via settlement now.  Otherwise, every major donor may be asking when not if I would be hit by lawsuits.

[ParkMan]

2 hours ago, ThenNow said:

When I survey the map of "closed states," even considering those with pending Victims Rights Act legislation, many of them have legislatures controlled by BSA and/or RCC-inclined Members. Some of these pieces of legislation have come up years in succession, only to die in committee. I know one state has the legislation parked in a committee controlled by a Representative who is Catholic and involved in Scouting. I am not saying that necessarily inclines him to vote against the legislation, but as a matter of fact he is vehemently opposed.

All that said, as I mentioned several days ago, the current political climate, coupled with the way the claimant side is reacting to the Plan and the amplification of it in the press, I think some VRA legislation could be dislodged in the wake of the case. Maybe. Those who feel totally safe today, may not be in the not too distant future.

Maybe it's just me - but I don't think this case is a big enough deal to influence legislation.  

The BSA is feels the heat and so will be pressured by publicity.  Similarly, this is important to the claimants and so they will feel passionately about it.  Like anything, a vocal minority has enough impact to get favorable articles in the press.  Yet, for your average person I just don't see that they are that inclined to pick a side here and advocate on their behalf.    Everyone is sympathetic to abuse victims.  Yet, few people like lawyers.  Many people were also involved in Scouting as a kid.  It's a no-win situation.

This is why I'm expecting a settlement that makes neither party happy, but leaves the BSA functioning.

Edited March 5, 2021 by ParkMan
fixed a glitch

[ParkMan]

3 hours ago, Eagle1993 said:

I'll also state that having separate LLCs does not mean they are necessarily separate.  For example, my company has 100s of LLCs ... but if my company went bankrupt, they wouldn't be able to say certain LLCs are not bankrupt as they are 1 corp.

Given that, I do wonder what is the legal framework.  I think the financial side is concerning.  For example, can a council leave BSA, take the council assets and join a different scouting organization?  Lets say BPSA ramps up and my council takes its camps, employees and assets and redeploys them to generate BPSA units.  Is that allowed?

 If you equate this to the franchise model ... owners of franchises can clearly take their profits/assets they own from one franchise business and use it for other, different franchises.  I've seen this when an owner left a Quiznos to open up a Subway.  This is where the franchise model gets murky in BSA as I don't believe councils have the ability to keep all of their assets (post rebranding).  Is that enough to not call them legally separate, I'm not sure.

I'm looking for some documents that would clarify that.  I found a fairly recent annual council charter agreement.  It's at: https://filestore.scouting.org/filestore/mission/pdf/523-027_WEB.pdf

I see nothing in here that binds a local council to send assets to national if they decide to leave or dissolve.  

There is the BSA Charter and Bylaws.  A copy is at: https://filestore.scouting.org/filestore/pdf/Charter_and_Bylaws_June_2019.pdf

In the BSA Charter and Bylaws it says:

Quote

Upon termination of a local council charter or dissolution of a council, all rights of management and ownership of local council property shall become vested in the National Council for use in accordance with the Rules and Regulations of the Corporation. Local council articles of incorporation and bylaws shall include or be revised to incorporate this provision at the time of chartering or the next charter renewal

So let's assume that my council had done this and put a section in it's bylaws that says it will send it's assets to national if it dissolves.  Couldn't the board of the council simply just vote and change the bylaws?  

The council agreement is an annual agreement.  As such, a local council could just say - we're not going to renew next year, then change it's bylaws, and move on.

As I see it - as a separate corporation the LC could easily decide to jump from the BSA to the BPSA.  

I see as inherent in all this is an assumption that this would not happen.  Why else would a council exist if not to be a part of the BSA.  But, with all that is going on, I could easily see councils doing exactly that.

 

Edited March 5, 2021 by ParkMan
clarified a thought

[mrjohns2]

Hey, I recall a court case that could shed light on are councils independent or not. I know the Girl Scout model is very different at times, but it is close. About 15 years ago, the GSUSA decided to stop the crazy ad hoc mergers and go from 250 to 110 councils (I don't recall the numbers). So, they announced the plans and started to merge. They had the same reasons as the BSA - lower enrollment, high camp costs, etc. All of their councils rolled over and agreed, except for at least one. They sued and said they were independent. GSUSA lost the court case that ensued and then ended up with 111. 

[mrjohns2]

53 minutes ago, ParkMan said:

So let's assume that my council had done this and put a section in it's bylaws that says it will send it's assets to national if it dissolves.  Couldn't the board of the council simply just vote and change the bylaws?  

All non-profits have to have method of, in its bylaws, for what happens to its assets should it dissolve. The disbursement has to be to another non-profit. 

[ThenNow]

1 hour ago, ParkMan said:

Maybe it's just me - but I don't think this case is a big enough deal to influence legislation.  

CHILD USA and multiple state legislatures strongly disagree with you on this point. I have spoke with the both groups numerous times about this case and the matter of state by state SoL reform.

[ParkMan]

5 minutes ago, ThenNow said:

CHILD USA and multiple state legislatures strongly disagree with you on this point. I have spoke with the both groups numerous times about this case and the matter of state by state SoL reform.

Guess it's just me then.

But - I don't think I'd change my point.  I don't think this specific case is enough to drive legislative action.  Sure, the principle may be something that people still advocate over. 

Do you really have groups telling you that they want to expand the SOL to specifically go after the BSA in more geographies?  Which groups are those again?

Edited March 5, 2021 by ParkMan
expanded the thought

[ThenNow]

2 minutes ago, ParkMan said:

Guess it's just me then.

Nah. I'm sure you're not alone. The explosion of the case numbers in particular, plus the fact that CHILD USA and these legislators HATE the use of bankruptcy to dodge child sexual abuse liability is the combined driver. Magnitude, whether legitimate or not, have elevated the case to a Exhibit #1 for abuse liability avoidance abuse. Doubly abusive, if you will.

[T2Eagle]

1 hour ago, ParkMan said:

I'm looking for some documents that would clarify that.  I found a fairly recent annual council charter agreement.  It's at: https://filestore.scouting.org/filestore/mission/pdf/523-027_WEB.pdf

I see nothing in here that binds a local council to send assets to national if they decide to leave or dissolve.  

There is the BSA Charter and Bylaws.  A copy is at: https://filestore.scouting.org/filestore/pdf/Charter_and_Bylaws_June_2019.pdf

In the BSA Charter and Bylaws it says:

So let's assume that my council had done this and put a section in it's bylaws that says it will send it's assets to national if it dissolves.  Couldn't the board of the council simply just vote and change the bylaws?  

The council agreement is an annual agreement.  As such, a local council could just say - we're not going to renew next year, then change it's bylaws, and move on.

As I see it - as a separate corporation the LC could easily decide to jump from the BSA to the BPSA.  

I see as inherent in all this is an assumption that this would not happen.  Why else would a council exist if not to be a part of the BSA.  But, with all that is going on, I could easily see councils doing exactly that.

 

So the triggering event for all the assets to vest in National is the end of the current charter if it's not renewed.

Upon termination of a local council charter or dissolution of a council, all rights of management and ownership of local council property shall become vested in the National Council for use in accordance with the Rules and Regulations of the Corporation. 

Assume your LC's charter expires 3/31/21.  If your local council doesn't renew than 3/31/21 is the "termination of the local council charter" and that's the day "ownership of local council property [becomes] vested in the National Council".  You can't revoke or disavow the agreement/contract after its provisions execute.  It's akin to saying I'll pay you $100 when you finish painting my house, and then when the house is painted you say I've decided not to pay because my house doesn't need painting any more.

Your council as a corporation could continue to exist, but at least in theory it would need to do so without any property or money because that would all belong to national.

This provision is probably pretty enforceable if a council really does just decide to quit and join BPSA, the question is whether BSA radically changing the terms of the Charter, like demanding millions of dollars for a renewal.

 

[fred8033]

20 minutes ago, T2Eagle said:

So the triggering event for all the assets to vest in National is the end of the current charter if it's not renewed.

Upon termination of a local council charter or dissolution of a council, all rights of management and ownership of local council property shall become vested in the National Council for use in accordance with the Rules and Regulations of the Corporation. 

Assume your LC's charter expires 3/31/21.  If your local council doesn't renew than 3/31/21 is the "termination of the local council charter" and that's the day "ownership of local council property [becomes] vested in the National Council".  You can't revoke or disavow the agreement/contract after its provisions execute.  It's akin to saying I'll pay you $100 when you finish painting my house, and then when the house is painted you say I've decided not to pay because my house doesn't need painting any more.

Your council as a corporation could continue to exist, but at least in theory it would need to do so without any property or money because that would all belong to national.

This provision is probably pretty enforceable if a council really does just decide to quit and join BPSA, the question is whether BSA radically changing the terms of the Charter, like demanding millions of dollars for a renewal.

 

Isn't this analogous to a franchise that buys goods from the parent corporation?  It's 100% separate for legal, tax and execution.  But if the franchise fails, it often has to return relevant assets to the franchising corporation.  In this case, the council promises to "vest" (... secure in possession ... ).  that does not necessarily mean "ownership" as much as ability to transfer to another agency to execute the purpose of the previous council.   .... 

I'd be curious if vested, legally means the same as "owns".   ... I'd also be interested if the "charter" agreement is binding between national and council.  It seems more like a friendly statement of agreement and not a legal contract.  

Edited March 5, 2021 by fred8033

[ThenNow]

2 hours ago, ParkMan said:

I don't think I'd change my point.  I don't think this specific case is enough to drive legislative action.  Sure, the principle may be something that people still advocate over. 

When Members of Congress take note, in the midst of publicity over the release of the dreaded files and fending off abuse suits, it's on the radar of advocacy groups. In our conversations related to child sexual abuse SoL reform, they specifically mention the BSA and RCC in the same breath. 

I should have added that CHILD USA and CEO/law professor, Marci Hamilton, have filed friend of the court briefs in BSA cases. They are adamant state that courts are have proper jurisdiction for child sexual abuse cases, not bankruptcy courts.

Edited March 5, 2021 by ThenNow
Clarification

[TAHAWK]

3 hours ago, ThenNow said:

Nah. I'm sure you're not alone. The explosion of the case numbers in particular, plus the fact that CHILD USA and these legislators HATE the use of bankruptcy to dodge child sexual abuse liability is the combined driver. Magnitude, whether legitimate or not, have elevated the case to a Exhibit #1 for abuse liability avoidance abuse. Doubly abusive, if you will.

I thick he asked about statute-of-limitations corruption, not bankruptcy.

[TAHAWK]

2 hours ago, fred8033 said:

Isn't this analogous to a franchise that buys goods from the parent corporation?  It's 100% separate for legal, tax and execution.  But if the franchise fails, it often has to return relevant assets to the franchising corporation.  In this case, the council promises to "vest" (... secure in possession ... ).  that does not necessarily mean "ownership" as much as ability to transfer to another agency to execute the purpose of the previous council.   .... 

I'd be curious if vested, legally means the same as "owns".   ... I'd also be interested if the "charter" agreement is binding between national and council.  It seems more like a friendly statement of agreement and not a legal contract.  

A contract is an "agreement" with certain chacteristics, depending on aplicable state law.   Most parties to such contarcts assume all will go as agreed, and the parties will ride off into the sunset with mutual satisfaction the order of the day.   That's why a cynical lawyer may have value; he may expressly provide for what happens if disagreement and conflict between the parties to the contract appear in the path of events..

[T2Eagle]

3 hours ago, fred8033 said:

Isn't this analogous to a franchise that buys goods from the parent corporation?  It's 100% separate for legal, tax and execution.  But if the franchise fails, it often has to return relevant assets to the franchising corporation.  In this case, the council promises to "vest" (... secure in possession ... ).  that does not necessarily mean "ownership" as much as ability to transfer to another agency to execute the purpose of the previous council.   .... 

I'd be curious if vested, legally means the same as "owns".   ... I'd also be interested if the "charter" agreement is binding between national and council.  It seems more like a friendly statement of agreement and not a legal contract.  

Vested means owns and agreements are legally binding.

What is VESTED?

Accrued; fixed; settled; absolute ; having the character or giving the rights of absolute ownership; not contingent; not subject to be defeated by a condition precedent. See Scott v. West, 03 Wis. 529 

<a href="https://thelawdictionary.org/vested/" title="VESTED">VESTED</a>

What is AGREEMENT?

A concord of understanding and intention, between two or more parties, with respect to the effect upon their relative rights and duties, of certain past or future facts or performances. 

<a href="https://thelawdictionary.org/agreement/" title="AGREEMENT">AGREEMENT</a>