Bankruptcy Losses

[RememberSchiff]

On 3/2/2022 at 2:31 PM, RememberSchiff said:

 

... the Outdoor Code

interesting letter to the editor from a selectman and a former selectman which begins:

“From a Cub Scout’s first hike in a local park to the thrill of our High Adventure bases, from our backyard to the backcountry, our outdoor ethics guide us to be responsible outdoor citizens — protecting our natural world for generations to come and being considerate of other visitors. Scouting has a long, proud tradition of conservation service to the nation.”

— Boy Scouts of America

...

The directors of the Connecticut Yankee Council have a duty to protect the fiscal health of the organization, but they also have a duty to protect the organization’s basic mission. Again from the Boy Scouts of America website: “Since its first appearance in the 1955 printing of the Boy Scout Handbook, the Outdoor Code has reminded Scouts to be conservation-minded.”

Source:

https://www.ctinsider.com/shoreline/article/Readers-write-Protecting-Deer-Lake-is-part-of-16977604.php

[yknot]

5 hours ago, RememberSchiff said:

interesting letter to the editor from a selectman and a former selectman which begins:

“From a Cub Scout’s first hike in a local park to the thrill of our High Adventure bases, from our backyard to the backcountry, our outdoor ethics guide us to be responsible outdoor citizens — protecting our natural world for generations to come and being considerate of other visitors. Scouting has a long, proud tradition of conservation service to the nation.”

— Boy Scouts of America

...

The directors of the Connecticut Yankee Council have a duty to protect the fiscal health of the organization, but they also have a duty to protect the organization’s basic mission. Again from the Boy Scouts of America website: “Since its first appearance in the 1955 printing of the Boy Scout Handbook, the Outdoor Code has reminded Scouts to be conservation-minded.”

Source:

https://www.ctinsider.com/shoreline/article/Readers-write-Protecting-Deer-Lake-is-part-of-16977604.php

Hopefully one of the partners involved -- trust, municipality, Senator's office -- will conduct an independent environmental assessment of the site as part of the appraisal process. In fact, an extension could be negotiated to allow more time for that to take place. It would be of benefit to any potential purchaser because previously unknown environmental site constraints can be uncovered or better delineated ahead of time instead of after the fact as frequently happens. Such information can have a downward effect on any projected appraisal prices. Generally such properties are bought without a lot of specific information that is only uncovered as the development process unfolds. Once you start trying to develop a site plan,  a developer suddenly discovers portions of the tract that cannot be developed due to wetlands, slopes, endangered species habitat, additional permits that are required that may be difficult to attain. It sounds like they have investigated some of it but there is likely more. 

[Eagle1993]

Three Harbors Council just announced that Indian Mound Scout Reservation is being sold to fund the bankruptcy.  It was established in 1917 ....

[RememberSchiff]

Minsi Trails Council is selling 900 acre Trexler Scout Reservation property in Monroe County, PA (Poconos) to help cover its $2.6 million conribution to the Trust.

"The council said it will take out a $4.5 million loan to help cover the debt and operations."

Starting in 2024, all Minsi Trails camping will occur at Camp Minsi on the 400-acre Stillwater Lake in Coolbaugh and Tobyhanna townships.

“Respectfully, this is quite possibly the most horrible decision that council leadership could have made,” Matthew Miles of Palmerton posted in a Facebook response to Minsi Trails Council’s post. “Thanks to the donation of the land by General Harry C. Trexler a century ago, scouting was given a chance to grow and flourish in Eastern Pennsylvania. Now, because no one wants to explore all options, or think outside of the box, this land will be gone. There is zero chance of getting this land back.”

“We were told nothing was going to change with the camps,” Peter Felton said. “To consolidate into one camp is ridiculous. It will require infrastructure. [Trexler] has two dining halls, a pool and an area built for the Cub Scouts, which Minsi would need to put in. This camp has been here since I was a child and it’s a legacy going away.”

In the last ten years, Council Boy Scout membership has declined from over 10,000 youth to 4,500.

Minsi Trails Council will also sell/relocate its Service Center and Scout Store. 

https://www.mcall.com/news/local/mc-nws-trexler-scout-reservation-closing-20220317-724t6mcsnnf5xf5qasshfjby6y-story.html

https://www.minsitrails.org/document/mtcstatement/208688

https://www.lehighvalleylive.com/news/2022/03/local-boy-scouts-council-to-sell-poconos-camp-to-pay-for-sexual-abuse-settlements.html

 

[SiouxRanger]

34 minutes ago, RememberSchiff said:

"The council said it will take out a $4.5 million loan to help cover the debt and operations."

Just who would lend that kind of money to a council that has lost 40% to 60% of its customers (% generally of councils)?

And, considering that 100% of the dues paid by those customers goes to National, not the council.

A council has no guaranteed revenue stream, just donations, and some fees.

What am I missing?

My best guess is that friendly lenders will make the "loan" with little expectation that it will be repaid, and someday write it off.  (The lender's shareholders will likely never know that they have been duped.)

And the BSA will continue to benefit from the "pass mentality" of folks-who-know-better-yet-despite-their-better-business-judgment-look-the-other-way, because, after all, "It IS Scouting."

"Well, India IS British." Some lame general in the movie Gandhi.

And, in my humble opinion, that "pass mentality" is why National is now where it is.

In bankruptcy accused of horrific lapses and active concealment.

National did not need to have a good plan as everyone was willing to give it a pass based on its reputation, and National interpreted that "pass" as an affirmation that it was "doing things right."

With respect to issues of abuse, National did many serious things wrong.

Debate as one might, National filed bankruptcy over it all. And therein lies the proof of its folly.

[SiouxRanger]

My council is looking to sell of about a third of our only camp.

But maybe we will be merged out of existence, regardless.

[Eagle94-A1]

My council is selling off 2 camps and some other properties folks have given over the years. One camp we are keeping is in a trust and we just use it. The main camp which cannot have Cub Scout boating activities since it is on a river, they plan on either building a closure in the river (like that will get approved), or they will dig a pond large enough for boats.

 

Mergers are coming and more camps will be closing.

[RememberSchiff]

1 hour ago, SiouxRanger said:

Just who would lend that kind of money to a council that has lost 40% to 60% of its customers (% generally of councils)?

And, considering that 100% of the dues paid by those customers goes to National, not the council.

A council has no guaranteed revenue stream, just donations, and some fees.

What am I missing?

My best guess is that friendly lenders will make the "loan" with little expectation that it will be repaid, and someday write it off.  (The lender's shareholders will likely never know that they have been duped.)

My guess, the loan will be connected to the sale of the camp, i.e., the buyer will self-finance or co-sign loan as part of a sweet purchase deal. I would like to know where the $4.5m will go. Perhaps to finance the missing infrastructure at the remaining camp? Maybe yet another STEM/Council Scout Center?

My $0.02,

[fred8033]

7 hours ago, SiouxRanger said:

Just who would lend that kind of money to a council that has lost 40% to 60% of its customers (% generally of councils)?

And, considering that 100% of the dues paid by those customers goes to National, not the council.

A council has no guaranteed revenue stream, just donations, and some fees.

What am I missing?

My best guess is that friendly lenders will make the "loan" with little expectation that it will be repaid, and someday write it off.  (The lender's shareholders will likely never know that they have been duped.)

And the BSA will continue to benefit from the "pass mentality" of folks-who-know-better-yet-despite-their-better-business-judgment-look-the-other-way, because, after all, "It IS Scouting."

"Well, India IS British." Some lame general in the movie Gandhi.

And, in my humble opinion, that "pass mentality" is why National is now where it is.

In bankruptcy accused of horrific lapses and active concealment.

National did not need to have a good plan as everyone was willing to give it a pass based on its reputation, and National interpreted that "pass" as an affirmation that it was "doing things right."

With respect to issues of abuse, National did many serious things wrong.

Debate as one might, National filed bankruptcy over it all. And therein lies the proof of its folly.

We really don't need more ugly hatred during such sad times.  This is very very hard for so so many that gave so so much.  

[fred8033]

7 hours ago, SiouxRanger said:

My best guess is that friendly lenders will make the "loan" with little expectation that it will be repaid, and someday write it off.  (The lender's shareholders will likely never know that they have been duped.)

Lenders don't sign contracts with the intent of fraud.  Even then, I'm not sure it is fraud if the council meets their settlement agreement. 

For the loan, more likely the council can show consistent fundraising capabilities and a measurable revenue stream thru service fees (camps, etc).  The 40% to 60% membership loss can be defended thru COVID analysis and controversys.  Though I agree the loan is probably via someone who has confidence in scouting, I really, really doubt the loan is done with the intent to write off the loss.  Plus, the council probably properties that can be used to underwrite the loan.

As for the $4.5 loan amount... and it is interesting number ... if you look up the acreage value for Monroe county, PA, undeveloped land can be from $4000 per acre to $10000 per acre.  900 acres at $5000 per acre is $4.5 million.  

So, there might be every effort by scouters to preserve the land.  If the settlement dollars are provided, there is nothing wrong with the council looking to keep going based on loans and future donations, etc.  

Scouting has a lot of good will and done great things.  I wish this council the best.

[SiouxRanger]

2 hours ago, fred8033 said:

We really don't need more ugly hatred during such sad times. 

Sorry-no ugly hatred intended, just trying to imagine what a council can say that would induce a lender to lend, and what a lender will see if they look at the available data.  It appears that the SE here does not believe a loan is likely (unless the lender is "very accommodating"-whatever that means).  I don't see how a commercial lender can simply ignore lending standards and practices.

Using available cash is apparently out. so that leaves a sale of part or all of camp.

I am given to understand that the council's contribution is due by the end of April or mid-May at the latest. That is a very tight timeframe to conduct and close a sale.

There are issues of survey, easements for access.  A buyer's lender's requirements being addressed.  Obtaining a title commitment, appraisal, and such.  It takes 30 to 45 days to get a mere house sale through the system. 

So, anyone know what happens if a council does not make its payment by the due date?  Does anyone know authoritatively when the due date is?

Another issue is if we sell only part of the camp, and then our council is merged out of existence, will we be selling off the balance of the camp?  I don's see much coordination of effort here.

[T2Eagle]

17 hours ago, SiouxRanger said:

Sorry-no ugly hatred intended, just trying to imagine what a council can say that would induce a lender to lend, and what a lender will see if they look at the available data.  It appears that the SE here does not believe a loan is likely (unless the lender is "very accommodating"-whatever that means).  I don't see how a commercial lender can simply ignore lending standards and practices.

Using available cash is apparently out. so that leaves a sale of part or all of camp.

I am given to understand that the council's contribution is due by the end of April or mid-May at the latest. That is a very tight timeframe to conduct and close a sale.

There are issues of survey, easements for access.  A buyer's lender's requirements being addressed.  Obtaining a title commitment, appraisal, and such.  It takes 30 to 45 days to get a mere house sale through the system. 

So, anyone know what happens if a council does not make its payment by the due date?  Does anyone know authoritatively when the due date is?

Another issue is if we sell only part of the camp, and then our council is merged out of existence, will we be selling off the balance of the camp?  I don's see much coordination of effort here.

It looks like they're borrowing now, probably mostly based on the future sale of the camp and scout office; they say the camp will still be open for two more summers..  They're borrowing $2 million more than their required contribution so I suspect/hope that they'll be reinvesting a lot into the existing camp.

Since there isn't any actually approved plan yet, I don't think there can be any hard deadline for payment.  Assuming approval, I think payments, payments in kind, etc. will be a big part of what the trustee has to work out.  The basic deal is that you get protection if you pay, an LC that doesn't ultimately pay gets thrown back into state court to face the music.

Who would lend?  Well, almost all LCs will still have assets, so there is property to provide some security, they have revenue from camps, and most have a record of proven fundraising.  Pus, interest rates are at near historic lows still, so the lender bumps the rate to reflect the risk.  

Edited March 20, 2022 by T2Eagle

[Better4itall]

This is such a very sad list, and I am certain that it will grow much longer before it's done.  So much history and so many memories disappearing.  I've seen camps turned into city, county or state parks, as well as one or two university facilities, and there are also land trusts that could keep the character of many of the wonderful places going indefinitely. 

[SiouxRanger]

11 hours ago, T2Eagle said:

Who would lend?  Well, almost all LCs will still have assets, so there is property to provide some security, they have revenue from camps, and most have a record of proven fundraising.  Pus, interest rates are at near historic lows still, so the lender bumps the rate to reflect the risk.  

Well, that's a thought.  Our council is poor compared to many.  I suppose it could pledge unrestricted assets on which it is earning 7-8% (invested in a fund managed by National, I think) and borrow at 2-4%, and attempt to pay back the loan from future donations and fees. Not enough unrestricted, invested funds to cover the whole settlement contribution, but maybe 2/3rds of it.  Perhaps borrow the remaining 1/3rd against the unimproved part of the camp. The unimproved part is mostly timber, some tillable (maybe 5 to 10%) and much of that under 6 feet of water in the spring flood.  I don't think that land will support a loan for 1/3rd of my LC's settlement contribution. It just can't produce much revenue relative to the debt service. Maybe 20 acres of corn, a timbering every 10 or 15 years, and deer hunting rental for those into that.

It will be a close run game in my LC.

Not that the outcome here is of any consequence to others, but the analysis might help someone solve their council's conundrum.

[fred8033]

8 hours ago, SiouxRanger said:

Well, that's a thought.  Our council is poor compared to many.  I suppose it could pledge unrestricted assets on which it is earning 7-8% (invested in a fund managed by National, I think) and borrow at 2-4%, and attempt to pay back the loan from future donations and fees. Not enough unrestricted, invested funds to cover the whole settlement contribution, but maybe 2/3rds of it.  Perhaps borrow the remaining 1/3rd against the unimproved part of the camp. The unimproved part is mostly timber, some tillable (maybe 5 to 10%) and much of that under 6 feet of water in the spring flood.  I don't think that land will support a loan for 1/3rd of my LC's settlement contribution. It just can't produce much revenue relative to the debt service. Maybe 20 acres of corn, a timbering every 10 or 15 years, and deer hunting rental for those into that.

It will be a close run game in my LC.

Not that the outcome here is of any consequence to others, but the analysis might help someone solve their council's conundrum.

Perhaps the council needs to do the bankruptcy route now to protect assets.  It's a poor business plan to structure with massive debt or damage / sell key assets that make the business valuable.