Chapter 11 announced

[fred8033]

1 hour ago, CynicalScouter said:

For the following reasons:

1) This bankruptcy is TECHNICALLY Boy Scouts of America ("National") and Delaware BSA, LLC (National's main affiliate, don't worry about it for these purposes.

2) Local Councils are TECHNICALLY "interested parties". They aren't bankrupt but they MAY be able to take advantage of the National bankruptcy given that they are co-defendants in many of the civil cases involved (e.g. John Doe Sexual Abuse Victim vs. Local Scout Council and Boy Scouts of America)

Now we have two big messes to figure out and/or the judge to rule on.

Are LCs really "separate": The argument being made, and that the judge hasn't ruled on yet, is that the LCs are NOT separate and are really appendages of National for a host of legal reasons arguments. The LCs are arguing they are separate for a host of legal reasons. Back and forth. Etc. If LCs ARE NOT separate, then their assets are considered National's and subject to the bankruptcy. If LCs ARE separate then....

Can LCs voluntarily participate in the settlement: National's plan is to settle ALL 80,000 sexual abuse claims against it. If LCs are truly separate, they are being given the OPTION AND CHOICE to climb on board that settlement and participate. But it is not free: if the LC wants to get any/all sexual abuse claims prior to February 2020 settled, they have to pay into the settlement fund. Again, VOLUNTARY.

So, how much will it cost an LC to climb on board the settlement? That depends on a very, very ridiculously complex formula that boils down in a really, really oversimplified way to

a) how many claims having been filed against the council

b) how much would those claims cost (on average)

c) how likely are those claims going to showing up in a courtroom and

d) what assets does the Council have to offer?

So, let's do another round of CynicalScouter's Magical Math.

a) XYZ Council has 100 claims against it and ALL are valid.

b) Each claim, on average, is going to cost $100,000 if this goes to court. This gets into some complexity, but to be blunt, it means assigning a cash value to sexual acts based on a points system. I don't want to go into details, but I think you get the idea that certain sexual abuse is more traumatizing than others.

c) There's a 5% chance of it showing up in court because XYZ Council is in a state that has a statute of limitations on civil claims for sexual abuse AND is unlikely to enact a look-back window or repeal that civil statute of limitations in the future (as has happened in NY, PA, etc.)

d) XYZ Council has $4 million in total assets, including the summer camp and council offices.

So, the math is

100 claims * $100,000 each * 5% chance of any of those 100 claims becoming a successful lawsuit = $500,000

Since $500,000 represents only 12.5% of XYZ Council's total assets, the price of admission/the price for XYZ Council to participate in the Settlement and have ALL 100 claims against it (and any other sexual abuse claims prior to February 2020) is $500,000. Take it or leave it.

But let's try that math again. Only now, the average claim is $1,000,000.

100 claims * $1,000,000 each * 5% chance of any of those 100 claims becoming a successful lawsuit = $5,000,000

Since $5,000,000 is way, way beyond XYZ Council's total assets, what is going to happen? Either the offer will be reduced down to something that results in XYZ surviving (say, $2 million from the sale of the summer camp and/or the Council offices) or XYZ goes into its own bankruptcy or XYZ walks away and takes the risk that its state never opens up the statute of limitations on civil claims for sexual abuse.

What about the insurance companies?: Last problem. ALL of this assumes that National and the LCs are going to have to pay something. But the insurance companies may be on the hook for more/even more. That's, in effect, a separate track. Several insurance companies are refusing to honor their policies saying that BSA lied when it signed them about how much sexual abuse they knew was going on and/or that insurance does not cover criminal acts. That's a whole other fight. If the LCs and National can convince the judge to force the insurance companies to pay the claims, then that Magical Math up there changes. It doesn't mean LCs pay $0 to get all claims waived, but maybe it means a lot less.

That's as clear as I can make it. Void where prohibited by law. Your mileage may vary.

 

Well written.   THANK YOU !!!!!!   

 

[Eagle1993]

2 hours ago, fred8033 said:

Yeah.  It's not realistic to represent a massive bankruptcy as an opportune moment to open up.  This is when companies remind employees that each and everything they say and publish can become part of the legal case.  This is far outside corporate leadership and marketing.  It's now a legal game.

 

IMHO, the ONLY way a settlement is reached is if there is trust from the TCC and the claimants that the offer represents a significant portion of local council available assets.  The only way the BSA LCs can establish this trust is through transparency.  Without transparency, I see no way the TCC recommends approval EVER.  Without their approval, there will never be a settlement that includes LCs.

 

[ThenNow]

7 minutes ago, Eagle1993 said:

The only way the BSA LCs can establish this trust is through transparency.  Without transparency, I see no way the TCC recommends approval EVER.  Without their approval, there will never be a settlement that includes LCs.

It seems apparent that hide the peanut is not working, which everyone clearly sees.   

[MYCVAStory]

10 minutes ago, Eagle1993 said:

IMHO, the ONLY way a settlement is reached is if there is trust from the TCC and the claimants that the offer represents a significant portion of local council available assets.  The only way the BSA LCs can establish this trust is through transparency.  Without transparency, I see no way the TCC recommends approval EVER.  Without their approval, there will never be a settlement that includes LCs.

 

This is why the TCC has employed BRG as its financial professionals to evaluate the finances of EVERY local Council, including properties and over 500 appraisals of properties have been completed.  The TCC is not going to trust any local council, insurer, or the BSA.  Per bankruptcy procedures BRG, who specializes in this, has had access to all internal BSA financial networks and is doing its own due diligence to determine BSA and LC financial ability to continue operation after contributions.  The TCC has also employed Pasich to do the same with the insurers.  Victims should not lose sleep over widespread hiding of assets.  As far as selling assets now, perhaps victims should feel good that now that would be an excellent idea for the LCs.  As long as it's done at fair market value (and remember, the TCC has its own appraisals that include a judgement as to whether those "deed restrictions" really exist) then it provides readily accessible cash for the settlement.  If not completed at FMV then action can be taken to unwind it.  The tide has shifted.  The TCC hired the best professionals that specialize in bankruptcy and is prepared. 

[5thGenTexan]

My council  is not part of the Ad Hoc committee.  They are going it alone it seems.

My council has a several hundred claimants on what was released the other day.  Could me more, could be less. who knows.

Its my understanding my council is ok moneywise, but once again who knows how far that goes.

[ThenNow]

51 minutes ago, 5thGenTexan said:

My council  is not part of the Ad Hoc committee.  They are going it alone it seems.

Just curious if they communicate with the AHC or vice versa. I don't quite understand the functioning of that group. When it was formed, I assumed it would be akin to the TCC, representing and communicating with and on behalf of all LCs. From what I've seen and heard, that ain't so. Add to it my rantings about who chairs the group and I wonder if it amounts to the country club set of LCs. Again, dunno. 

[ALongWalk]

What does TCC mean?

[ThenNow]

2 minutes ago, ALongWalk said:

What does TCC mean?

Tort Claimants Committee, which is the official entity appointed by the US Trustee to represent the interests of all sexual abuse survivor claimants in the case. It's comprised of 9 survivor claimants and represented by a group of attorneys other professionals, some noted above.

[CynicalScouter]

1 hour ago, ThenNow said:

From what I've seen and heard, that ain't so

It is an entirely voluntary grouping. Councils are free to cooperate, not cooperate, do their own thing, hire their own counsel, etc.

First, keep in mind the Ad Hoc Committee represents ONLY 8 councils
Andrew Jackson Council
Atlanta Area Council
Crossroads of America Council
Denver Area Council
Grand Canyon Council
Greater New York Councils
Mid-America Council
Minsi Trails Council

Second, the committee put a warning on its documents, such as an objection to a motion

Quote

For the avoidance of doubt, this Objection is submitted on behalf of the Ad Hoc Committee and not on behalf of any individual member.  The undersigned represent only the Ad Hoc Committee and not any of its members individually.  The Ad Hoc Committee does not represent (and this Objection should not be construed as a statement on behalf of) any of the individual Local Councils who are targets of the Rule 2004 Motion.

And Circle Ten has made it abundantly clear the Ad Hoc committee can go do whatever it wants, Circle Ten's doing its own thing.

Quote

Although the Ad Hoc Committee of Local Councils (the "Local Councils Committee") is a Mediation party, Circle Ten Council is not a member of the Local Councils Committee and has not given the Local Councils Committee authority to negotiate on behalf of Circle Ten Council or bind Circle Ten Council to any agreement in these chapter 11 cases.

Third, there are at least 15 councils who have filed notices of appearance and/or filed motions on their own behalf. They are operating utterly independent of the Ad Hoc Committee and, in some instances, indirect opposition to the Ad Hoc Committee

1. Aloha Council
2. Baltimore Area Council
3. Bay-Lakes Council
4. Buffalo Trail Council
5. Capitol Area Council
6. Circle Ten Council
7. Del-Mar-Va Council
8. East Carolina Council BSA, Inc.
9. Imperial Council Boy Scouts of America San Diego
10. Indian Waters Council
11. Northern New Jersey Council
12. Orange County Council
13. Sequoia Council of Boy Scouts
14. Simon Kenton Council
15. Three Harbors Council Inc.

IT IS MY UNDERSTANDING that numerous (how numerous? No idea) councils have implicitly agreed to let the Ad Hoc committee do all the heavy lifting. BUT as I said, some council (Circle Ten, Baltimore Area) are really in go-it-alone mode, or were before November and the 80-90 thousand claims.

It isn't clear if they decided to start to play nice or if those claims numbers increased the council infighting. Who knows? They aren't about to advertise openly that the Ad Hoc committee and, say, Circle Ten are screaming at each other or what not.

Again, us lowly ("low level volunteers" as Scott Berger just called us) are just not given one bit of data. This forum is, bar none, the ONLY source of information about this most scouters have access to unless they want to claw through the court docket item by item.

So no, this is the OPPOSITE of TCC. TCC has authority, a clearly defined role, clearly defined attorneys, and works as a team  of lawyers together (or at least does so publicly, they may all squabble in the background for all we know).

Ad Hoc Committee is a cat herding exercise in which a the cats range from kittens to lions and the lions are just as likely to eat the cat herder as help. It has no authority over the other 220+ councils outside of "Oh, come on, PLEASE?"

 

Edited March 16, 2021 by CynicalScouter

[Eagle1993]

Very interesting document.

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/881153_2391.pdf

From what I understand, the claimants are asking the court to estimate their total damages (bottoms up) year by year.  So, for example, if an average sex abuse claim should be paid off by $500K and there are 84,000 claims the total amount would be $42B.  Then, that would be broken into year by year.  Then they can figure out what National, LC, CO and their insurance companies could pay to hit the $42B.  (Not necessarily $42B, but you get the idea).  Don't forget, the insurance is complex as there are different policies for different years for different groups and each policy has max payouts.

Interesting ... I wonder if the court will support this method.  It could help set a top down target that the BSA & insurance companies need to meet bottoms up (or at least target).  

Edited March 16, 2021 by Eagle1993

[MattR]

Forming, Storming, Norming, Performing anyone?

[ThenNow]

18 minutes ago, CynicalScouter said:

Ad Hoc Committee is a cat herding exercise in which a the cats range from kittens to lions and the lions are just as likely to eat the cat herder as help. It has no authority over the other 220+ councils outside of "Oh, come on, PLEASE?"

Ok. That completely explains why this is a Jackson Pollock painting. [Said entirely in jest, though descriptively. I adore Pollock, even the early, quirky surrealistic stuff.]

22 minutes ago, CynicalScouter said:

Third, there are at least 15 councils who have filed notices of appearance and/or filed motions on their own behalf.

Are these filed randomly throughout the docket, I'm guessing?

[CynicalScouter]

12 minutes ago, Eagle1993 said:

Interesting ... I wonder if the court will support this method.  It could help set a top down target that the BSA & insurance companies need to meet bottoms up (or at least target).  

At first look, it is clear that they still cannot even come close to a number for how much we are talking here.

This is the ball game right here

Quote

The Parties Are Unable To Find Common Ground As To The Scope And Value Of The Sexual Abuse Claims

Who owes what, and how much?

This process would answer the "how much" and then that sets the stage for "Who"?

Quote

The Proposed Plan and Disclosure Statement do not purport to inform holders of Abuse Claims how much they will receive on account of those claims. That is because the Debtors have no idea.

and

Quote

Meanwhile, the parties’ mediation efforts have foundered. The parties fundamentally disagree as to the scope and value of the sexual abuse claims, and by extension the size of the trust necessary to compensate survivors. Without common ground on those basic issues, it is simply impossible to make headway toward a confirmable plan.

I though (and still think) the court may reverse it figure out the WHO first, namely, are the LCs really independent and autonomous? Or are they mere appendages of National (which means ALL LC assets are on the table).

EDIT: This is gutsy. Telling a judge something is "mandatory" that he/she "shall" do is pretty gutsy.

Quote

Estimation is mandatory here. Section 502(c) of the Bankruptcy Code provides that the court “shall” estimate “any contingent or unliquidated” claims against a debtor if the “fixing or liquidation” thereof “would unduly delay the administration of the case.” 11 U.S.C. § 502(c) (emphasis added);

EDIT 2: Even at warp speed (which those filing the motion admit this is a FAST schedule) it will be AT LEAST FOUR MONTHS (111 days) before they have an estimate for how much is going to be owed the Abuse Claimants.

That means even if the court granted the motion TODAY, that's July 5, 2021. And remember: National keeps crying it is going to run out of money any day now.

Edited March 16, 2021 by CynicalScouter

[5thGenTexan]

So, I was "What Ifing" in my head earlier today.  In another thread there was discussion about where money goes if a Unit ceases to exist.  To the CO or to the Council.  I think it was shown after Unit obligations were taken care of and money raised for Scouting goes to the Council.

IF National is liquidated and its found that LCs are on the hook as well and they for all intents and purposes are dissolved,  Can that mean they start calling on Units, all of them, to empty their accounts and send it in?

Edited March 16, 2021 by 5thGenTexan

[CynicalScouter]

19 minutes ago, ThenNow said:

Are these filed randomly throughout the docket, I'm guessing?

Yeah, random. Some came in early

Notice of Appearance. Filed by Sequoia Council of Boy Scouts, Inc.. (Walter, Riley) (Entered: 02/18/2020)

02/18/2020