Chapter 11 announced - Part 3 - BSA's Toggle Plan

[Eagle1993]

Just now, CynicalScouter said:

As I said, the Hartford thing was a joke. $650,000,000? Keep adding zeros to the end of that ($6.5 billion? $65 billion?) and there's a conversation somewhere in there.

Kosnoff's team dug into this a bit and they believe that Harford is able to get the $650M from Warren Buffet's reinsurance company (so essentially they can settle with almost no impact to their bottom line).  He is spending a ton of time ripping the various insurance companies (and their families).  I think the $650M really touched a nerve as most plaintiff lawyers probably know deep down BSA has limited unrestricted assets (they will argue how much, but it is not $5 - $10B).  The various insurance companies; however, do have some deep pockets and will borrow to stay out of bankruptcy ... so seeing $650M when the expectation is (as you said) 10 times that really got them upset.

I wonder if BSA thought the Harford agreement would help their cause ... it looks like it hurt.

[vol_scouter]

10 minutes ago, CynicalScouter said:

As I said, the Hartford thing was a joke. $650,000,000? Keep adding zeros to the end of that ($6.5 billion? $65 billion?) and there's a conversation somewhere in there.

Wikipedia has the operating income of the Hartford Insurance company to be $2.82 B so the $650 M is about 23% of that.  Seems like a reasonable offer to me.

[Eagle1993]

2 minutes ago, DuctTape said:

Do you or anyone else know the $ amount (if any) listed on the BSA's insurance policy? 

Please forgive my ignorance as my only experience with insurance policies is car, house, life, and medical and all of them have maximum $ amounts as part of the policy.

Very, very difficult to determine.  National & LCs each had their own insurance policies that vary by time period.  In addition, each of those may have some sort of limit of coverage.  You have to piece together 100s if not 1000s of insurance contracts to see the total amount and then compare that to how many claimants there are within that time frame against that policy.

 

[yknot]

6 minutes ago, elitts said:

There are two main issues with Youth Protection:

1. Most adults are inclined to trust the other adults around them and can't really imagine abuse happening around them.
2.  It is exceedingly difficult to get strict compliance from volunteers, particularly when the behaviors you are trying to control are happening in a dispersed setting.

Those points are meaningless in this context. At best, they can pointed to as excuses for YP failure. The claimants are looking for competency in YP as one of their demands for the BSA to go forward. 

[Eagle1993]

3 minutes ago, vol_scouter said:

Wikipedia has the operating income of the Hartford Insurance company to be $2.82 B so the $650 M is about 23% of that.  Seems like a reasonable offer to me.

Lets say if you look at the combined total of all insurance contracts they have over the time period and max payout is $10B.  Then $650M is a steal for them. 

Insurance payouts are not based on the operating income of the insurance company.  Just look at AIG.  They owe what they owe.  If they go bankrupt, then they will have to determine how much they have to pay during their own Chapter 11.

[elitts]

Just now, yknot said:

Those points are meaningless in this context. At best, they can pointed to as excuses for YP failure. The claimants are looking for competency in YP as one of their demands for the BSA to go forward. 

How is that meaningless?  Those are exactly the problems that needs to be resolved.  The current YP rules leave basically ZERO space for abuse to happen if they are followed. (I suppose maybe a pair of abusers could work together, but that seems unlikely)

And the claimants don't have anything that resembles a coherent desire when it comes to YP other than to say "we want to make sure this never happens again", which of course isn't possible.  Even when the subject of "What changes do you think should be made" comes up, the suggestions always revolve around reporting, not actual changes in YP guidelines.

[RememberSchiff]

As mentioned earlier, Chubb the other BSA insurer has attempted to buy The Hartford at least 3 times in the last two months.

March 11, Chubb offered $65 a share, a 13% premium for shareholders and a valuation at about $23 billion.

March 30, Chubb  offered over $67 a share.

April 14,  Chubb increased its offer to “$70 per Hartford share, the top end of our range,” payable approximately 60% in cash and 40% in Chubb stock.

All rejected by The Hartford.

Another thought, the largest payout for either insurer will likely not be BSA related claims, rather covid.  Winter storm damage claims in Texas and other states will also be a big payout.

Chubb has an estimated market value of $72B.

https://www.courant.com/business/hc-biz-the-hartford-rejects-more-buyout-offers-chubb-20210422-twlr5wfww5d27ikbzuqndkhbiq-story.html

https://www.businessinsurance.com/article/20210422/NEWS06/912341344/Hartford-profits-fall-9-in-Q1-catastrophes-COVID-19-coronavirus-virus-pandemic-

Another $0.02,

Edited April 22, 2021 by RememberSchiff
add second link, winter storm payout

[vol_scouter]

1 minute ago, Eagle1993 said:

Lets say if you look at the combined total of all insurance contracts they have over the time period and max payout is $10B.  Then $650M is a steal for them. 

Insurance payouts are not based on the operating income of the insurance company.  Just look at AIG.  They owe what they owe.  If they go bankrupt, then they will have to determine how much they have to pay during their own Chapter 11.

We are all guessing as to the limits of coverage.  I could just as easily posit that the maximum is $650 M and they are offering the maximum.  

My point is that no matter how much the attorneys want to get enormous pay checks, the companies involved have a finite amount of money.

The BSA has little more to offer.  It is giving up its building in Irving, Texas, supply (which makes several million dollars every year) with its buildings and stock, oil and gas holdings, the Norman Rockwell paintings, and other things.  The high adventure bases are valued at about $60 M for Philmont, Sea Base, and Northern Tier whereas the $350 M for the Summit looks good until one considers that J. P. Morgan has a lien for the loan to purchase it that is probably more than $300 M.  So the BSA made a reasonable offer.  The attorneys are disappointed but it is not a bad offer based upon its resources.

[yknot]

1 minute ago, elitts said:

How is that meaningless?  Those are exactly the problems that needs to be resolved.  The current YP rules leave basically ZERO space for abuse to happen if they are followed. (I suppose maybe a pair of abusers could work together, but that seems unlikely)

And the claimants don't have anything that resembles a coherent desire when it comes to YP other than to say "we want to make sure this never happens again", which of course isn't possible.  Even when the subject of "What changes do you think should be made" comes up, the suggestions always revolve around reporting, not actual changes in YP guidelines.

They are meaningless in that they are tactical aspects of what is an overall strategic problem: There are broad organizational reasons why BSA is in the situation it is in.  You could find a way to "fix" those two problems and still continue to have abuse cases if overall structural issues that create those situations in the first place are not addressed. These structural issues have been discussed ad nauseum on this site for years so they are easy to find if you want examples.  

[T2Eagle]

16 minutes ago, Eagle1993 said:

Very, very difficult to determine.  National & LCs each had their own insurance policies that vary by time period.  In addition, each of those may have some sort of limit of coverage.  You have to piece together 100s if not 1000s of insurance contracts to see the total amount and then compare that to how many claimants there are within that time frame against that policy.

 

In addition to the challenege of figuring out what the coverage was, the insurance companies also argue, similar to the victims, that BSA knew about  the extent of the problem of predation, and that by hiding that they either voided or limited the amount of coverage that the insurers need to provide.  So it's not even a straightforward math problem of totaling up all the policies. 

I would be surprised if there a billions with an s available in insurance payouts unless the insurers were unusually dumb or open ended in their policy writing.

[Eagle1993]

 

5 minutes ago, vol_scouter said:

We are all guessing as to the limits of coverage.  I could just as easily posit that the maximum is $650 M and they are offering the maximum.  

My point is that no matter how much the attorneys want to get enormous pay checks, the companies involved have a finite amount of money.

The BSA has little more to offer.  It is giving up its building in Irving, Texas, supply (which makes several million dollars every year) with its buildings and stock, oil and gas holdings, the Norman Rockwell paintings, and other things.  The high adventure bases are valued at about $60 M for Philmont, Sea Base, and Northern Tier whereas the $350 M for the Summit looks good until one considers that J. P. Morgan has a lien for the loan to purchase it that is probably more than $300 M.  So the BSA made a reasonable offer.  The attorneys are disappointed but it is not a bad offer based upon its resources.

Harford can likely afford $16B plus.  They can sell off all of their investments/equity.  It is not an offer based upon their resources to pay.  

BSA could sell off their HA bases and increase their offer.  TCC is going to sue JP Morgan over that loan.

Chubb will have to make an offer.

LCs .. the TCC knows how much they can pay (they already assessed 500+ properties)

COs ... who knows ...

So ... the TCC and lawyers know what the real ability to pay is and I expect it is well north of the $1.1B offer.

The only way this resolves quickly is BSA and insurers and LCs greatly increase their offer.  If they don't, get ready to wait years in court.  Many of these lawyers have been in this rodeo before.  They play the LONG game.  They have spent 4 years in court battles in the past over $20M.  Do you really think they give up hundreds if not billlions of dollars without a long court battle?  

[Eagle1993]

14 minutes ago, T2Eagle said:

I would be surprised if there a billions with an s available in insurance payouts unless the insurers were unusually dumb or open ended in their policy writing.

One of the topics in the May hearing is the estimation request.  The TCC wants an estimate by claim.  That way, they can look at every claim vs every insurance policy.  Let's say Council A had a policy by Harford from January 1 to December 31 1990 with a maximum payout of $3M.  The TCC will want to look at the total amount of claims (from the estimation process) they would have against that policy (that council in 1990).  If it is $1.1M ... they want the $1.1M payout from that policy.  There are both National & LC policies they will look at.

The issue with Harford and Chubb is that they insured National & LCs all over the place for a long period of time.  So sure, 1 policy max payout may be $3M  ... but then if they have hundred of policies over the years and many of them start maxing out they could be on the hook for billions.

That is why the insurance companies are fighting against the estimation proposal.  They know the end result and its bad for them.  They raise some valid points (how can you legitimately estimate this in a bankruptcy hearing when civil action for a single case could take a considerable amount of time).  

This is at least my understanding of the liability side.

[vol_scouter]

Assuming that the Hartford and other companies have a maximum payout, then that should determine what they pay.  I know that attorneys have made insurance companies pay more but that is wrong.

J. P. Morgan loaned money for the Summit, there should be no lawsuit.  Once again, it is wrong.

The CO's had agreements that the BSA was to provide insurance, suing them is wrong. 

Being wrong may have nothing to do with anything.  Our justice system seems to have little to do with justice and seems broken.

[skeptic]

3 hours ago, CynicalScouter said:

I see. So, lawyers who take on sexual abuse cases are evil vultures?

And how, exactly, do you think these abuse victims are suppose to file a lawsuit? Go pro se?

And LCs are not "state sanctioned". They are registered and incorporated as not for profits by each state, but so what? That does not mean the State of Vermont's governor can order LCs not to turn over their assets to national should national refuse to recharter the LC.

No, lawyers that abuse the legal system and search for "victims" with vague promises and misleading claims are worse.  IF they were only going after the actual abusers or predators, they would not fall into that category, but hey are likely doing almost as much harm as the original predator by dragging emotional pain out of the past and causing many to have to again deal with it.  As noted before, no amount of money will salve this, and the destruction of BSA serves no purpose, other than one of greed by these lawyer vultures.  None of this is ever going to stop the predators, as they will always find a way and will never go away.  The idea that somehow BSA can absolutely stop them is simply ignorant.  It is a dirty and greed shaded vendetta.  

[CynicalScouter]

2 hours ago, vol_scouter said:

the $350 M for the Summit looks good until one considers that J. P. Morgan has a lien for the loan to purchase it that is probably more than $300 M. 

TCC and others are claiming that the $300 M is returnable to BSA, therefore not a real lien but a shell game to make it appear Summit is encumbered when it really isn't.