Chapter 11 announced

[CynicalScouter]

Eisenberg, Rothweiler, Winkler, Eisenberg & Jeck, P.C. responds to the insurance companies demand that they disclose information. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/873825_2143.pdf

1)The three lawfirms (Eisenberg +  Kosnoff Law + AVA Law) claim they are not an official entity, only an informal

Quote

fashioned an informal cooperation of law firms known as Abused in Scouting. AIS is not what Hartford and Century would have the Court believe. AIS is not a partnership, it is not a brand, it is not a law firm; it is simply a collaboration of law firms that have joined together to provide a voice to the victims of childhood sexual abuse

and

Quote

Despite their characterizations of AIS as an entity, it is clear from Coalition filings that AIS is not an entity, but the product of the collaboration of three professional corporations: (i) Kosnoff Law PLLC; (ii) AVA Law Group, Inc.; and, (iii) Eisenberg, Rothweiler, Winkler, Eisenberg & Jeck, P.C.
 

and

Quote

Contrary to Hartford’s and Century’s assertions, AIS is not a partnership, it is not a brand, it is not a law firm, it is simply a message for those that were abused in scouting to come forward.

and
 

Quote

AIS is neither an informal group nor a committee but a collaboration of law firms that joined together to provide a voice to victims of childhood sexual abuse.

In other words, Abused in Scouting does (and doesn't) exist. It is just the name/brand of three lawfirms who are working together (?)

 

Edited February 12, 2021 by CynicalScouter

[CynicalScouter]

And the Kosnoff response is...something to behold. https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/873821_2142.pdf

Quote

Because the Insurers fear Mr. Kosnoff’s experience, expertise and dogged determination, they resort to efforts to suspend his First Amendment rights, muzzle his passionate opinions of what happened to his clients and silence the opinions that pose existential threats to them.

and

Quote

Though Mr. Kosnoff personally withdrew from Coalition activities, his clients stand by any membership in the Coalition that they previously indicated. Mr. Kosnoff will continue to represent those clients with zeal, to the best of his ability and without cowering under the Insurers’ tactics of intimidation.

 

[vol_scouter]

1 hour ago, CynicalScouter said:

It is funny you put it this way. I had district roundtable last night during which a member of Council staff sat in to give us general updates.

Take what I am about to say with copious salt but it is consistent with various things my Council's said over the last 3-4 months and I am feeling MUCH better about BSA's chances.

1. The original idea when BSA filed bankruptcy was to have a restructuring plan by March 2021. Despite everything, they are still kinda on track (it is pushed to April).
2. "Most of plaintiffs lawyers are not looking to target councils." This was/is the Kosnoff problem; he wants to Councils liquidated/all Council assets put on the table. "Most" of the plaintiffs lawyers would be OK with councils paying into a victim's trust fund based on a formula/computation/algorithm that is being worked out that measures a) the number of claims filed in that council b) likelihood of success that factors in that the statute of limitations in that state may have lapsed BUT could always be brought back (see the "look back" windows" in NY, PA, etc.) and c) available Council assets.
3. The plan now is to have a restructuring plan by April and approved by the court so that the May annual meeting can be the restart and "rebranding" of BSA. The insurance companies and the plaintiffs attorneys would then spend the next however long slitting each others throats, but BSA would be out of the equation at that point.
4. The entire sticking point is Kosnoff and his side. Again, see point #2. If Kosnoff pushes this and demands that the court rule on the question of access to Council assets (namely, that Councils are not independent but are in fact appendages of National) or convinces the court that in fact yes Council assets = National assets, this whole thing gets blow up. BSA National is then "on a ticking clock" to run out of cash on hand/no cash flow by July or August. Then things get desperate; can BSA get bridge loans or come up with a plan to survive until the bankruptcy ends? And of course if you are like Kosnoff and simply want BSA dead, dragging this out is in your interest (if not your client's).

So on the one hand I am more optimistic than I was and it is possible that BSA can be out of this mess by summer, but then again there are still too many moving parts to know for sure.

 

CynicalScouter,

There is little that is positive with this Chapter 11 filing but your post is a relative positive. 

Whether the BSA could find a lending institution to bridge them with a loan is doubtful because they risk losing nearly all of their loan if the BSA is eventually liquidated.  The BSA must submit a five business plan that shows that it is very likely to be viable.  For example, the court might accept a modest membership increase after covid in a business plan but large growth would likely not be accepted because we have a long history of modest membership loss.

The different reasons why claimants might be removed from the pool appears to be a large number, but the overlap in those groups is likely not negligible.  Whatever that number ends up will be negotiated by insurers and plaintiffs representatives.  As noted above, there is a finite amount of money that the BSA and local councils can provide and remain viable.  My guess is that the plaintiffs attorneys will overwhelmingly want to take that amount now rather than force the BSA into liquidation and spend years going after the local councils.

Things might be looking up just a little.

[CynicalScouter]

3 minutes ago, vol_scouter said:

My guess is that the plaintiffs attorneys will overwhelmingly want to take that amount now rather than force the BSA into liquidation and spend years going after the local councils.

Yes, except the Kosnoff/Abused in Scouting group who would rather just burn BSA to the ground. The question is does that group have enough leverage to stop any deal short of that.

Edited February 12, 2021 by CynicalScouter

[John-in-KC]

My two cents

someone wrote the Councils should stay out of this.  
 

The plaintiff’s lawyers won’t let that happen. They’re just not on the laser aiming dot ... yet. 

[CynicalScouter]

48 minutes ago, John-in-KC said:

someone wrote the Councils should stay out of this.  The plaintiff’s lawyers won’t let that happen. They’re just not on the laser aiming dot ... yet. 

There are two "this" that are being referenced and yes, that laser dot has been aimed at councils already.

The first is the current fight between the insurance companies and the lawyers for Abused in Scouting over whether Abused in Scouting (and especially Kosnoff) are in fact one entity which has to file disclosures with the court and never did. THAT one the Councils should stay out of it because it is between the insurance companies and AIS. There's no focus on the Councils there and they should stay out of it because it is the insurance companies that have the axe to grind there.

The second is the broader fight between the insurance companies and the law firms who filed THOUSANDS of claims as to how many of those claims are

a) valid

b) valid, but outside the statute of limitations

c) minimally defective (e.g. person wrote they were in Pack 132, it was really Pack 123)

d) invalid

Those firms are claiming Council assets AND have done so since the start. There's nothing new there. Councils have been in it since the start.

[RememberSchiff]

"The judge presiding over the Boys Scout of America bankruptcy is weighing a request to allow insurance companies to serve document requests on a sampling of 1,400 people who have filed sexual abuse claims.

...In addition to wanting to question alleged abuse survivors, the insurance companies on Wednesday requested permission to question and collect documents from 15 plaintiffs’ attorneys who personally signed hundreds of claims. Claim forms typically must be signed by the claimants themselves, but in the days leading up to the deadline last November, some attorneys signed several hundred claim forms a day.

...An attorney for the Boy Scouts told Judge Silverstein that the Irving, Texas-based organization needs to exit bankruptcy by late summer and hopes to file a plan within the next few weeks, with a hearing in April seeking court approval of the proposal.

...The judge gave no indication on when she would rule."

More at source:

https://www.usnews.com/news/us/articles/2021-02-17/insurers-question-claims-process-in-boy-scouts-bankruptcy

[CynicalScouter]

17 minutes ago, RememberSchiff said:

An attorney for the Boy Scouts told Judge Silverstein that the Irving, Texas-based organization needs to exit bankruptcy by late summer and hopes to file a plan within the next few weeks, with a hearing in April seeking court approval of the proposal.

Right, we are still a year in and, to my knowledge, there are some major questions still pending

1) I do not believe the court ever ruled on the question of whether Council assets can be considered National's for purposes of the bankruptcy. The argument (that the independence of Councils is a fiction and that National controls) was I don't think ever settled.

2) The number of victims. As the article noted, at the time of the original bankruptcy filing there was only ~1675 claims ("275 lawsuits and told insurers it was aware of another 1,400 claims"). Obviously with 95,000 claims we are light-years beyond 1675. But that leads to...

3) The Insurance Companies. How much are they willing to pay? Able to pay?

If they can get the judge to agree in/around April to the terms of an agreement, then May's Annual Meeting becomes the roll out of the "new" BSA. They've already said many times they plan on a new marketing and branding campaign, etc.

Of course, the other possibility is this drags, BSA keeps losing cash, and by summer is out of money.

Edited February 18, 2021 by CynicalScouter

[elitts]

On 2/12/2021 at 11:26 AM, CynicalScouter said:

Yes, except the Kosnoff/Abused in Scouting group who would rather just burn BSA to the ground. The question is does that group have enough leverage to stop any deal short of that.

Since he has been quite public in his desire to see the BSA ended completely, I have to think it's going to count against him with a bankruptcy court judge.  The accepted motivation for a Bankruptcy case creditor is "How do I think I'll get the most money".  If his "I want to crush this organization out of existence" desire starts to be obviously in conflict with what everyone else thinks will net the most money for the other debtors, his influence should wane considerably.

At least, that's what logic would dictate; but obviously the amount of logic being utilized varies with the judge. 

[RememberSchiff]

Perhaps the BSA should "be prepared" for a delay as has occurred repeatedly this past year, Specifically,  have a list of most marketable assets (Judge approved) to liquify and reschedule the May Meeting to September/October (blame covid).

My $0.02,

[DavidLeeLambert]

48 minutes ago, CynicalScouter said:

Right, we are still a year in and, to my knowledge, there are some major questions still pending

[...]

2) The number of victims. As the article noted, at the time of the original bankruptcy filing there was only ~1675 claims ("275 lawsuits and told insurers it was aware of another 1,400 claims"). Obviously with 95,000 claims we are light-years beyond 1675. But that leads to...

3) The Insurance Companies. How much are they willing to pay? Able to pay?

[...]

First of all, it's only 86,000 claims, because of all the duplicates (although a few late claims with good reason for the delay might still trickle in). I don't think anyone has publicly disclosed whether some of the "duplicate" claims are Omnis's fault, for assigning a new claim number to filings that were meant to be amendments to prior claims, or that were true exact duplicates submitted by the same person as a precaution (say someone did the electronic submission and also sent a hard copy in by certified mail the same day).  But in a filing earlier this week one of the insurers' experts noted one case where one of the claimant lawyers had submitted three claims for the exact same person, two exact copies of each other, the third with an additional page, all on the same day.

At oral argument yesterday, one of the claimant lawyers attacked the insurers' skepticism of the 95,000 number, by saying that BSA already has "8,000 proven abusers" and that it's generally known that sexual abusers typically have 100-200 victims apiece.  From what I've seen in the public portion of the Ineligible Volunteer Files, I don't buy that. There are a few cases where the file contains a general reference to a dozen-odd potential victims. There was one file I read where the accused Scouter was a Silver Beaver recipient, and the file only identified one victim. It's conceivable in that case that the recorded victim was the case where he "finally got caught", and he'd been successfully scaring his prior victims into silence for many years. But there are other cases where the ineligible adult was placed in the file within months of first applying to be a scout leader, based on conduct that occurred before any affiliation with Scouting, and there is no mention of a victim in the IVF record, and the adult could not have actually had any contact with more than a handful of Scouts before the revocation of his registration.

Another of the claimant lawyers claimed that they shouldn't have to respond to any discovery requests from the insurers because the insurers "have all this information" and were not sharing it with them. An insurer's lawyer said in his response on that motion that, in fact, they have no information.  All they have is the IVF records that have been made public already, and this pile of 95,000 filings, without any other way to get more information about any of the claims than to attempt discovery.

Regarding how much the insurance companies are able to pay... if I understand some of the notations in IVFs from the period of 1940-1975 or so, there was a long time when the annual registration fee per Scout or Scouter was $1.00 per year.  It was $7.00 in the late '80s (when Donald Trump recorded his son's Cub Scout dues as a charitable contribution in that exact amount). I'd be surprised if the insurers collected anywhere near even a billion dollars in total premiums from the BSA during the 20th century, and BSA was big enough that it may have been a significant fraction of some of the insurers' premium receipts in some years.  It may be that the insurers themselves are looking at bankruptcy if they have to start paying out a million dollars each on thousands (let alone tens of thousands) of abuse claims.

[CynicalScouter]

57 minutes ago, DavidLeeLambert said:

I'd be surprised if the insurers collected anywhere near even a billion dollars in total premiums from the BSA during the 20th century, and BSA was big enough that it may have been a significant fraction of some of the insurers' premium receipts in some years

And that's what the next question/defense would be from the insurers

"Your Honor, if we have to pay $5 billion, we are going to be filing bankruptcy next."

And that's why Kosnoff et al. push for seizing Council assets.

[CynicalScouter]

Let's be absurdly charitable here for a second. Of the 95,000 claims, let say only 25% are valid and actionable.

23,750 claims at a "mere" $10,000 per is $237,500,000 (hundreds of millions). Ok. Fine. That is workable.

BUT According to BishopAccountability.org, the average settlement for clergy sex abuse victims is approximately $268,000.

Now we are talking 6 BILLION.

Even for something like Hartford (70.82 billion in assets), that's not pretty.

 

Edited February 18, 2021 by CynicalScouter

[Eagle1993]

32 minutes ago, CynicalScouter said:

And that's what the next question/defense would be from the insurers

"Your Honor, if we have to pay $5 billion, we are going to be filing bankruptcy next."

And that's why Kosnoff et al. push for seizing Council assets.

I expect zero chance this happens.  

- If you are in the insurance business and threaten bankruptcy when you are asked to pay out claims, what is the value of your product?  Every insurance competitor would highlight that when working with businesses.

- Most of these companies are publicly traded.  I could imagine the stock price impact if their lawyers  are saying they plan to go bankrupt if they have to pay a settlement.

- The judge doesn't care if the insurance company has to go bankrupt.  I don't know of any judge that would base a settlement on if the payer has the ability to pay.  Settlements are based on the law and contracts.  The judge would probably say fine, go bankrupt.  You owe $5B.

Now, I do expect the insurance companies to fight over the next several years to get as much leverage to lower their overall payout.  Hopefully BSA can stay out of that fight and protracted legal fight.

Kosnoff is fighting for council assets as he wants National, Council, Insurance and possibly CO assets.  He wants the biggest pot of $ possible and likely believes liquidation of BSA may be the best way to get there.

[elitts]

13 minutes ago, CynicalScouter said:

Let's be absurdly charitable here for a second. Of the 95,000 claims, let say only 25% are valid and actionable.

23,750 claims at a "mere" $10,000 per is $237,500,000 (hundreds of millions). Ok. Fine. That is workable.

BUT According to BishopAccountability.org, the average settlement for clergy sex abuse victims is approximately $268,000.

Now we are talking 6 BILLION.

Even for something like Hartford (70.82 billion in assets), that's not pretty.

 

I don't think any rational person would find the situation with the Catholic Church as being anywhere close to the situation with the BSA.

Catholic Church: Knew for decades that priests were raping kids, actively covered up the incidents, then moved the priests to new communities and put them right back in a position to rape more kids.

BSA:  Knew that pedophiles were attempting to gain access to children through the program and created a system to eject and keep out pedophiles once they were identified. 

Functionally, these are completely different situations, and so reasonably one would expect the settlements to be substantially different as well.