Chapter 11 announced

[swilliams]

1 minute ago, CynicalScouter said:

A) Take ALL 80,000 claims currently pending.

B) How much is the AVERAGE cost for each claim going to be?

Multiply A*B = How much needs to go into the Settlement Fund when all this is over.

Then the next part: who pays for what parts of that number. BSA? Local Council? COs? Insurance companies?

Thanks. I’ve seen your magic math on this pages back, working from two ends, just didn’t make the connection.

[CynicalScouter]

2 minutes ago, swilliams said:

I’ve seen your magic math on this pages back, working from two ends, just didn’t make the connection.

Right, the magic math is either

1) Establish all available assets and divided by abuse claimants OR

2) Establish all debt (abuse claims) and then figure out who has to pay what.

That's where BSA National, LCs, and insurance companies will start to slit each others throats. For TCC purposes, however, it won't matter. The TCC will have a number and then leave it do BSA, LCs, and the insurance companies to figure it all out.

[5thGenTexan]

11 minutes ago, swilliams said:

Can someone please explain to me what “Estimation of Claims” is in layman’s terms?

Also, is anything happening prior to the status conference in mid-April?  And is that just what it sounds like; a check-in on progress of BSA supplying rosters?

From what I can tell by reading the last four pages, there’s been no ruling on whether LCs are separate, is that right?  Did she indicate whether LCs must come to the table?  We all know they’re going to have to, but as of now they’re still not being required to?

Thanks.  

I am just trying to figure out if what happened yesterday is Good.  Bad.  Neutral.

[ThenNow]

9 minutes ago, CynicalScouter said:

How much is the AVERAGE cost for each claim going to be? That is going to require the court to go through either a sampling or all claims. Probably just a sampling (e.g. 800 out of 80,000). This will be almost like a mini-trial. Victims may be required to testify. Experts brought in to discuss pain, suffering, loss of income, etc.

Do you have a case reference as an example? Any documentation on how these go down? Trial as in, corroborating witnesses, questioning the accused and the whole nine? I can't imagine the latter, since that is typically not part of vetting these tort claims, but in District Court...?

[CynicalScouter]

Just now, 5thGenTexan said:

I am just trying to figure out if what happened yesterday is Good.  Bad.  Neutral.

For whom? And some of it we won't know for a long time.

This may actually be good for everyone in the sense that there has been $100 MILLION dollars worth of foot-dragging and precisely NOTHING to show for it. A fired up judge practically ORDERING the parties into a locked room (bring a toothbrush) to get things done may be a good thing. Or it may just prove a useless exercise because everyone remains locked into place without more data

1) How many of the 80,000 claims are valid? No idea

2) How much is each claim worth, approximately? No idea

3) What assets does BSA REALLY have to offer? No idea (BSA's put out its version of asset list, TCC is saying BSA is full of BS)

4) What assets do to Local Councils REALLY have to offer? No idea (Like BSA, LCs are pleading poverty or restricted assets, TCC is calling shenanigans)

4.5) Are LCs mere appendages of National and therefore who cares what LCs think their assets are, for these purposes LC assets = BSA assets.

5) What assets do the insurance companies have to offer? They still insist they won't pay a dime because BSA lied to them in obtaining the insurance policies.

And on and on and on.

$100 million and we are no closer to any of these answers than we were a year ago.

 

[CynicalScouter]

5 minutes ago, ThenNow said:

Do you have a case reference as an example? Any documentation on how these go down? Trial as in, corroborating witnesses, questioning the accused and the whole nine? I can't imagine the latter, since that is typically not part of vetting these tort claims, but in District Court...?

It's in the motion papers.

Quote

Here, the estimation will bear the hallmarks of a “trial”: The parties will take fact discovery, offer experts, call witnesses, and try to judgment the aggregate value of the Abuse Claims. The District Court may well make case-dispositive legal rulings, and the estimation will culminate in a binding judgment setting a de facto cap on the value of Abuse Claims for distribution purposes. See supra at 8-9. Estimation of these personal injury claims therefore must proceed in the District Court. See Moore v. Idealease of Wilmington, 358 B.R. 248, 252 (E.D.N.C. 2006) (“Although some courts construe section 157(b)(5)’s use of the term ‘tried’ to mean that a  bankruptcy court may resolve pre-trial motions in such actions, this court believes that (absent consent) a district court should retain control over all aspects of personal tort injury claims under section 157.”); cf. PG&E., Dkt. No. 3671 (withdrawing reference for personal injury claims arising from wildfires).

 

[ThenNow]

7 minutes ago, CynicalScouter said:

It's in the motion papers.

I was reading "Beetle Bailey" and "Blondie" and avoided that. (Old guys...for you.) I admittedly skimmed. I signed up for CynicalScouter's Cliff Notes Day After Parties so I can eat bonbons and sip champagne while reading the "juicy parts." Sorry. 

I am curious, though, to get more detail. I want to know about the power to call claimants and, effectively adjudicate their claims as an exemplar for creating an aggregate estimate. That's the sort of in the weeds stuff I meant.

Edited March 18, 2021 by ThenNow

[ThenNow]

21 minutes ago, ThenNow said:

That's the sort of in the weeds stuff I meant.

https://restructuring.weil.com/claims/mass-tort-bankruptcies-and-valuation-considerations-in-the-claims-estimation-process/

How Have Courts Estimated Mass Tort Liabilities in Chapter 11 Cases?
Despite this lack of explicit statutory guidance, the Garlock court found useful precedent in the various estimation decisions of other large chapter 11 cases involving asbestos liabilities, specifically those of Eagle-Picher Industries, USG Corporation, G-1 Holdings, Owens Corning, Federal-Mogul, W.R. Grace, Armstrong Industries, and Specialty Products.  In fact, the court boiled these asbestos-related claims estimation proceedings down to four general principles.
 

First, the court observed that each court endeavored to reach a fair estimate based on the particular facts and circumstances of the case before it, recognizing the validity of the competing concerns of the various litigants in attempting to reach a proper resolution.  Indeed, even when valuation is not in dispute, the Garlock court recognized the general prudence of reaching its “own estimates of liability.”
 

Second, the court noted that the debtor’s role in estimation can vary from case to case.  At times, litigants reach a consensual resolution in order to propose a plan of reorganization.  At other times, the debtor is agnostic to the value of the claims because it has no financial exposure.  In other cases, the debtor, like Garlock, hotly contested claimants’ liability estimates.  The level of a debtor’s participation can also inform the court as to its acknowledgement of — or challenge to — liability.
 

Third, the court observed that the type of asbestos product at issue can be relevant in determining the extent of a particular debtor’s liability.  Garlock argued that its products produced a small dose of a less potent form of asbestos in contrast to the products of comparable debtors, and the claimants failed to produce persuasive evidence to the contrary.  Accordingly, the court concluded that historical asbestos estimations from those other cases were inapplicable to Garlock.
 

Fourth, the court recognized that a debtor’s claims resolution history (i.e., its prepetition litigation settlements) could be a useful — if not even the best — data point in estimating a debtor’s acknowledged liability.  However, it is neither the exclusive nor controlling means to estimate liability, particularly where a bankruptcy court has discretion to determine the appropriate method of estimation in light of the particular facts and circumstances of the case before it.

The Garlock Conclusion
Noting that it had conducted a seventeen-day plus trial, with 29 witnesses and hundreds of exhibits, the Garlock court reached its estimation of present and future mesothelioma claims with these principles in mind.  The present and future claimants’ representatives argued for a “settlement” based approach to estimation by way of statistical extrapolation from Garlock’s history of resolution of mesothelioma claims, a methodology employed in other asbestos-related bankruptcy cases.  In contrast, the debtors argued for a “legal liability” approach that focused on the merits of the claims, reduced further by claimants’ prospects for recovery from other sources, to develop a projected estimate of value.

Recognizing that the settlement approach was generally useful in an estimation analysis because a defendant’s “own history of valuing claims in the tort system” may serve as a reliable benchmark of acknowledged liability, the court concluded that its application to Garlock was of limited use where (1) there was evidence of substantial malfeasance by plaintiffs’ attorneys in the underlying litigations (including, among other things, withholding exposure evidence and purporting to not have filed claims in other debtors’ chapter 11 cases so they could inflate their clients’ claims against Garlock), and (2) significant evidence suggested that Garlock’s settlement data represented a strategy of “cost avoidance” rather than actual liability.  Accordingly, the court rejected the entirety of the claimants’ experts’ estimation data and relied entirely on the “reasonable and reliable estimate” of Garlock and the work of its experts.
 

Garlock’s estimate was “based on econometric analysis of current data produced in discovery by the representatives of a sizeable sample of the current claimants,” with “applied parameters based on observation and accepted measures.”  Specifically, Garlock had created an analytical database from questionnaires that it had sent to the current claimants’ law firms as part of its discovery efforts.  The data produced included job histories, asbestos exposure information relating to Garlock’s and third-parties’ products, claims and recoveries made in the tort system, and claims made to other asbestos plaintiffs’ trusts.  The court observed that Garlock’s efforts resulted in the “most extensive database about asbestos claims and claimants” that had been “produced to date” and, unlike historical information, was the “only data” that accurately reflected the pool of claims against Garlock.
 

From this “reasonable and representative” sample, Garlock’s experts extrapolated estimates of Garlock’s liability for current claimants ($25 million) and for future claimants ($100 million).  Although the estimate was a “‘projection,’” the court concluded that it was accurate and reliable.  As a result, the court held that Garlock’s aggregate liability for present and future mesothelioma claims was $125 million — in contrast to the claimants’ estimation of $1-1.3 billion.
 

The Takeaway
Claims estimation can be important for many reasons when it arises in the context of plan confirmation, particularly as a court examines feasibility and fairness.  Accordingly, practitioners and experts alike should be aware of its potential impact on total enterprise value at exit and ensure that their presentation is both reasonable and reliable in order to win claims estimation litigation.

Edited March 18, 2021 by ThenNow
Oops. Missed a spot.

[ThenNow]

I'm just looking for case examples and articles. It's pretty interesting. 

[5thGenTexan]

2 hours ago, CynicalScouter said:

For whom? And some of it we won't know for a long time.

This may actually be good for everyone in the sense that there has been $100 MILLION dollars worth of foot-dragging and precisely NOTHING to show for it. A fired up judge practically ORDERING the parties into a locked room (bring a toothbrush) to get things done may be a good thing. Or it may just prove a useless exercise because everyone remains locked into place without more data

1) How many of the 80,000 claims are valid? No idea

2) How much is each claim worth, approximately? No idea

3) What assets does BSA REALLY have to offer? No idea (BSA's put out its version of asset list, TCC is saying BSA is full of BS)

4) What assets do to Local Councils REALLY have to offer? No idea (Like BSA, LCs are pleading poverty or restricted assets, TCC is calling shenanigans)

4.5) Are LCs mere appendages of National and therefore who cares what LCs think their assets are, for these purposes LC assets = BSA assets.

5) What assets do the insurance companies have to offer? They still insist they won't pay a dime because BSA lied to them in obtaining the insurance policies.

And on and on and on.

$100 million and we are no closer to any of these answers than we were a year ago.

 

Good, bad, or neutral for the Unit.  Do I still need to make big recruiting plans for August / September?  Do I need to think about how I tell elementary school kids they can't do Scouts anymore or can that hold off for a while after these new developments?  So on and so forth.

[CynicalScouter]

56 minutes ago, 5thGenTexan said:

Good, bad, or neutral for the Unit.  Do I still need to make big recruiting plans for August / September?  Do I need to think about how I tell elementary school kids they can't do Scouts anymore or can that hold off for a while after these new developments?  So on and so forth.

We told our parents we did not expect BSA to be alive much past the summer. We are hopeful, but we gave people warnings that this was looking pretty bad.

The biggest challenge here is that National's not saying a word, Councils are NOT talking much at all (and lately it has been only to say "We are selling the camp", and so all that leaves is guesswork.

No one is going to be able to say for sure what PRECISELY is going to happen until after it is all over. That could be months. It could be YEARS.

Edited March 18, 2021 by CynicalScouter

[swilliams]

52 minutes ago, 5thGenTexan said:

Good, bad, or neutral for the Unit.  Do I still need to make big recruiting plans for August / September?  Do I need to think about how I tell elementary school kids they can't do Scouts anymore or can that hold off for a while after these new developments?  So on and so forth.

We don't have any recruiting events planned (thanks Covid), but will hold off of basing any plans around the outcome of the bankruptcy, with the exceptions of telling Life scouts to hurry up (and encouraging the same for Star).  We're planning on welcoming the AOL's as usual.  Dues aren't due for any current scouts until fall anyway.

[CynicalScouter]

Just now, swilliams said:

with the exceptions of telling Life scouts to hurry up (and encouraging the same for Star). 

Yep. Our Life scouts are getting personalized attention to get to Eagle by June.

[Eagle1993]

We are avoiding any communication to our parents yet, other than telling scouts this will be the last year to go to CFL for summer camp.

I think I may know more by late April.  If that hearing goes south and it looks dire, I'll probably raise the alarm with my life scouts. More like a ... hey, just in case ... you probably want to finish off your 6 Eagle Required partial merit badges you have been sitting on and go ahead and get that project we have been discussing approved.  

[5thGenTexan]

I won't post who posted it, but statements bordering on threats are popping up on FB,

 

"If you are not part of the process and on regular calls with the Ad Hoc Committee on this, PLEASE do not keep posting the "what ifs" on this site!!"