Chapter 11 announced

[5thGenTexan]

This may not be the right thread for this, but I am hesitant to create a new one.  I dont guess its any secret to anyone here that I am nuts.    Aside from all the what ifs we have discussed and how things are actually progressing and the beginnings of camps now being sold.  It feels like the end of the BSA is inevitable at this point and the domino effect of everything below it.  And it feels eerily the same as when my grandmother got sick.  She started mixing up he/she and then slowly declined before finally dying of Alzheimers.  The hardest part was not the day she died, but the day she left home to go to the assisted living.  I knew this, it was never going to be the same.

Today I kind have that feeling of dread that a point of no return has come or will be coming soon.  That being said, I think paying attention to daily updates even if nothing substantial is happening is good.  I really feel bad for the people that are either ignoring what is going on and those that simply have no idea.  When the day comes they are really going to take this hard.

[TAHAWK]

If the jury knows the policy limit, there would be a mistrial in Ohio.  Some judges declare a mistrial if the word "Insurnace" is mentioned by the plaintiff's side.   Often, defense council secure an order prohibiting mention of insurance if plaintiff's counsel is a known bad actor. 

 

I didn;t have to worry about that issue much  when I was defending multi-billion-dollar corporations.  Juries assume that they have endless wealth, and my client for the last twenty-seven years was self-insured in any case.  But one plaintiff's counsel mentioned insurance anyway (in a death case), and the judge declared a mistrial sua sponte.  

[Eagle1993]

Anybody watching the zoom of the Chapter 11 hearing today?  Any punches thrown? Just heard that there was an exchange that $100M has been spent on lawyers to date and $150M will be spent by August.  Judge called it "staggering".

[CynicalScouter]

20 minutes ago, Eagle1993 said:

Anybody watching the zoom of the Chapter 11 hearing today?  Any punches thrown? Just heard that there was an exchange that $100M has been spent on lawyers to date and $150M will be spent by August.  Judge called it "staggering".

No. The Zoom link appears limited to parties and attorneys. I would expect media reports and even a transcript of portions later.

EDIT: Typically the transcript is available to lawyers and parties 2 days later and the public 60-90 days.

Edited March 17, 2021 by CynicalScouter

[CynicalScouter]

23 minutes ago, Eagle1993 said:

Just heard that there was an exchange that $100M has been spent on lawyers to date and $150M will be spent by August.  Judge called it "staggering".

This is why I don't think BSA was lying/bluffing when it said it would run out of money by the summer. This keeps going and BSA is going to run out of money to pay TCC, its own lawyers, etc.

Then, I honestly don't know what happens in bankruptcy when the debtor runs out of $$. I would guess the lawyers would then have a lien on any claims coming out of the bankruptcy.

Edited March 17, 2021 by CynicalScouter

[Eagle1993]

3 minutes ago, CynicalScouter said:

Then, I honestly don't know what happens in bankruptcy when the debtor runs out of $$. I would guess the lawyers would then have a lien on any claims coming out of the bankruptcy.

The law firm needs cash flow as well., I don't see them working for credit.  So ... perhaps JP Morgan can loan the BSA MORE money that will then be spent on lawyers.  Or National can special assess councils (each council needs to provide $1M or they lose their charter).  Or they sell properties to fund legal expenses.  Even at $10M per month, I think the BSA can find cash to support this for a long time (unless they decide a better strategy is to liquidate National).

 

[David CO]

1 hour ago, 5thGenTexan said:

I dont guess its any secret to anyone here that I am nuts.    

That goes without saying.  You're a scouter.  

[ThenNow]

1 hour ago, Eagle1993 said:

Anybody watching the zoom of the Chapter 11 hearing today?  Any punches thrown? Just heard that there was an exchange that $100M has been spent on lawyers to date and $150M will be spent by August.  Judge called it "staggering".

That is accurate as to all. She also lit a fire regarding a mediation meeting (I expect everyone to attend...no excuses) and the proposed Estimation of Claims. Discussion was toward the latter moving to District Court, but sounded like it's very backed up. Judge Silverstein said she was prepared to grant some of the discovery requests, but it seemed like elements would be covered in the Estimation so she would wait and see if they are folded in.

From the attorneys, lots of reiteration of what has been seen in recent filings. He said. She said. That's not what I said! I told you so. They're not cooperating. I know you are, but what am I. Mom, she's pulling my hair. Yes, I am because you (claimants' side) keep dragging your feet and it's making me spend too much money and it's almost gone. The TCC is lying...we (insurers and LCs) don't have multiples of $300M! We (AHC) resent the TCC's implication that we're farting around and not coming to the table! We're cooperating in all respects, vigorously representing the LCs...the picture of angelic good faith negotiators. The Coalition is just playing cute and coy, say the insurers. Again, lots of what was seen in past and recent filings, effectively pre-cursers to oral argument on Plan and Disclosure opposition. David Buchbinder (Trustee's Office) interjected an observer's "human perspective" regarding taking care of the survivors and doing right by them. I was distracted at the moment, so only caught it with one ear. 

That's not much for detail, but it does give you the flavor of what went down.

Edited March 17, 2021 by ThenNow

[Eagle1993]

11 minutes ago, ThenNow said:

Estimation of Claims. Discussion was toward the latter moving to District Court, but sounded like it's very backed up.

This will be interesting if it moves forward.  Has she discussed restricted assets (JP Morgan/Summit)?

[CynicalScouter]

16 minutes ago, ThenNow said:

Discussion was toward the latter moving to District Court, but sounded like it's very backed up.

Kick it to District Court where this will grind for another 1-2 years.

Meanwhile, BSA loses all cash on hand and does what pay the attorneys with IOUs?

As I noted: even the warp-speed Estimation plan is 111 days. This would take multiples of that.

Edited March 17, 2021 by CynicalScouter

[ThenNow]

Just now, Eagle1993 said:

This will be interesting if it moves forward.  Has she discussed restricted assets (JP Morgan/Summit)?

I don't believe so.

She started off exasperated with the entire crew because of the extensive last minute "paperwork" that landed on her desk and took away from what she had planned to discuss and/or rule on (discovery). Then she was getting feedback into the courtroom from the Zoom audio and recessed for 5 to deal with it. More frustration. 

I saw a full compliment of press names in their "Hollywood Zoom Squares," so I'm sure a recap will land tonight or first thing tomorrow. I had three things going on at once and am not the best court reporter to begin with. Sorry

[ThenNow]

2 minutes ago, CynicalScouter said:

As I noted: even the warp-speed Estimation plan is 111 days. This would take multiples of that.

The new Mrs. Lauria (BSA/Jessica Boelter) made specific note of that and lodged a strong objection. The judge did say, "if the Estimation is not before me," indicating, to my reading of it, that she's not keen on it going elsewhere. Just my sense. Again, it was noted that the District Court judge is way slammed at the moment.

[CynicalScouter]

2 minutes ago, ThenNow said:

Again, it was noted that the District Court judge is way slammed at the moment.

Here's an interesting thought that a bankruptcy lawyer might need to parse out.

1. TCC is paid for by debtor (BSA).
2. Debtor BSA runs out of cash in August 2021. No more payments to TCC and we are MONTHS if not YEARS away from a resolution.
3. TCC then becomes a CREDITOR IN THEIR OWN RIGHT against the "estate" of BSA.

 

[MisterH]

How did the BSA end up being forced to pay for both their own lawyers as well as their opponents' lawyers?

Edited March 17, 2021 by MisterH

[DavidLeeLambert]

16 minutes ago, ThenNow said:

1 hour ago, Eagle1993 said:

Anybody watching the zoom of the Chapter 11 hearing today?  Any punches thrown? Just heard that there was an exchange that $100M has been spent on lawyers to date and $150M will be spent by August.  Judge called it "staggering".

That is accurate as to all. She also lit a fire regarding a mediation meeting (I expect everyone to attend...no excuses) and

I can confirm.  In the same comment, she said that "the victims need to be compensated appropriately and BSA's mission needs to continue." She moved the Plan hearing two weeks back, to the end of April, with a status conference April 12th or 13th.

To put the legal-fees-so-far figure in perspective...

• That's a significant fraction of the book value of Summit Bechtel (or perhaps more than what it could actually fetch at sale any time soon, especially in a post-COVID, post-BSA environment where no one wants to run a campground because of the risks and liability)
• That's more than the book value of any other HA base, perhaps more than all of them put together
• That's more than the total net assets of any single Local Council
• That's about $50 per Scout registered at the end of 2019
• ... or more than $1000 per Abuse Claimant

And I've alluded to it before, but by my calculations the total amount of registration fees that BSA collected during the 20th century has to be less than $883 million. (126 million Scouts through some recent date, and registration was $7.00 in 2003). So someone may be able to make the argument that their liability for the total of all pre-1999 abuse should be limited to that figure.

1 hour ago, CynicalScouter said:

The Zoom link appears limited to parties and attorneys. I would expect media reports and even a transcript of portions later.

No, it was open to anyone who received notice of the hearing (including by seeing it on the public docket) and signed up in advance, and was willing to have their name displayed while attending the meeting. It was "open court". Although the Judge did say that, had she been meeting with counsel in-person, she would have requested some of the status updates in chambers.