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

[CynicalScouter]

3 hours ago, gpurlee said:

national BSA but also a number of local councils, chartered organizations and insurers alike

There remains a non-zero chance that BSA National ceases to exist at the end of this. LCs and COs are going to be sued/forced into their own Chapter 11 and Chapter 7s.

[Eagle1970]

Is there any one group that controls 67% for approval purposes?  I wonder, to what extent, the law firms will vote (rather than individual claimants).  To this point, I am pro se, as it appeared to me the large clusters (i.e. Abused in Scouting) would do the heavy lifting.

 

[CynicalScouter]

17 minutes ago, Eagle1970 said:

I wonder, to what extent, the law firms will vote (rather than individual claimants)

That is currently being debated.

In short:

1) EVERY victim will have the right to vote. There is 0% chance that this can or will be taken away from you personally or any victim.

2) SOME victims may (I say may here) waive the right and turn it over to their attorney. So, AIS or the Coalition, for example, may be able to say "We have XX,XXX clients who have turned their votes over to us. And we vote Yes/No."

Now, it is possible the court will rule no, lawyers cannot proxy vote/vote on behalf of their clients. 84,000 ballots go to 84,000 people and that is that. 67% of votes TURNED IN are required to move ahead with the plan.

It is also possible the court will approve a proxy-vote plan where AIS, or the Coalition, can cast those XX,XXX votes.

I would expect that will be part of the fight at the May hearing. Of course, it is possible it will be delayed; no sense deciding how to vote on the plan until we actually get a plan.

There are also related fights about the ballot.

When the ballots go out, they will contain a copy of the plan in the envelope. Will that envelope ALSO contain a) a statement from BSA why victims should approve the plan b) a statement from the TCC and their view of the plan c) a statement the Coalition, AIS, or some other group and their view(s) of the plan?

All this is TBD.

Edited April 24, 2021 by CynicalScouter

[Eagle1970]

Only slightly off topic, please be aware that if you "Like" Abused in Scouting on Facebook, Facebook will proceed to inform all of your friends that you like the group/page.  I found out the hard way when my Mother in law told my wife that she saw I liked AIS and asked her about my abuse-awesome for a person who considers this the most private matter in life.  I would have to assume my other friends and associates saw it as well.  So, I unliked it and filed a complaint with FB, which clearly loves to violate privacy.

[ThenNow]

1 hour ago, Eagle1970 said:

Only slightly off topic, please be aware that if you "Like" Abused in Scouting on Facebook, Facebook will proceed to inform all of your friends that you like the group/page.  I found out the hard way when my Mother in law told my wife that she saw I liked AIS and asked her about my abuse-awesome for a person who considers this the most private matter in life.  I would have to assume my other friends and associates saw it as well.  So, I unliked it and filed a complaint with FB, which clearly loves to violate privacy.

I’m sorry. That’s terrible and one reason I’ve eschewed all social media, other than this forum.

[Eagle1970]

6 hours ago, Eagle1993 said:

WSJ reporting Century may go bankrupt over the BSA lawsuit.

 

https://www.wsj.com/articles/boy-scouts-sexual-abuse-claims-threaten-financial-havoc-for-insurance-companies-11619211199

Century writes some high-risk business and with high risk comes....well....risk.  Fully owned by a holding company of a holding company of a holding company owned by Chubb, it would only be a paper bankruptcy.  Another Chubb subsidiary will come along and assume it with a different name and they end up with a big tax loss and tons of profit down the line.  

[CynicalScouter]

Looks like negotiations are over.

Counsel for TCC and others are demanding document and other discovery production from Century, Hartford and BSA. While the demand requests are not online, I would suspect that a lot of the focus is going to be on how that $650 million deal got struck, etc.

Kosnoff, who likely has access to the discovery requests, is making it clear that negotiations are over. That is in keeping with that barn burner of an objection filed by FCR and others earlier this week.

Demands on Century https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/889956_2684.pdf

Demands on Hartford https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/889954_2683.pdf

Demands on BSA https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/889956_2684.pdf

Edited April 25, 2021 by CynicalScouter

[ThenNow]

1 hour ago, CynicalScouter said:

 

Looks like negotiations are over.

Counsel for TCC and others are demanding document and other discovery production from Century, Hartford and BSA.

 

As we both said several times, they almost literally invited this. Several ways and several times. Maybe this pulls the wagon out of the ditch, at long last.

[Eagle1993]

I saw Kosnoff’s tweet yesterday and was wondering why he made the statement about discovery.   He mentioned that the mediators were also served.  It really seems the judge has lost all control.  

[ThenNow]

37 minutes ago, Eagle1993 said:

He mentioned that the mediators were also served.  

Are the substantive docs expected to land in the docket? I'm not sure if they're sealed behind the mediation wall or what.

[CynicalScouter]

2 hours ago, Eagle1993 said:

He mentioned that the mediators were also served.

No, only three of the parties to the mediation (BSA, Century, Hartford) were served.

Frankly, if they even TRIED to demand production from the mediators it would be (almost) instantly quashed by the court. The whole idea of private mediation is you cannot force the other sides, and ESPECIALLY the mediators, to reveal those proceedings outside some extraordinary showing (e.g. during mediation, one party indicated they were actively engaged in current criminal conduct).

But if you were not part of that mediation, you can ask on what basis the conclusion was reached. So, here, the claim is the Hartford need only pay $650 million. Where did that number come from? What is Hartford's current financial status? What was the maximum that could have been sought? In other words, the MEDIATORS can never, ever say (again, outside of some extreme circumstances), but you better believe that the other parties, especially parties that may have a claim to Hartford's insurance policies (TCC, Coalition, etc.) have a legal interest in how that $650 million number came about.

Also keep in mind: $650 is what BSA and Hartford agreed to. That does NOT mean it is what a) the court will agree to or b) what 67% of the abuse victims will accept.

As @ThenNowhas pointed out over and over, BSA seems to truly think it can cut deals with everyone else (JP Morgan Chase was first, now Hartford) and in the end just...what? Expect the judge to order a cramdown? Expect to get 67% of abuse victims to simply say "fine, we give up, we'll take what we can get?"

Remember: at the end of the day the purpose of a Chapter 11 is for the debtor to emerge, alive and functioning (for at least 5 years). BSA's cutting deals to just be done with this, taking pennies on the dollar to get out of this ASAP. And their plan is going to be to offer something to victims that amounts to "this is the best we can do".

That's why the TCC needs to be allowed to offer its own BSA reorganization plan ASAP. I suspect that will include

1. Selling at least 2 HA bases (which BSA now says are either necessary for future operations and/or restricted. Let's see what the court has to say about that)
2. Allowing TCC to directly negotiate with the insurance companies and JP Morgan Chase from this point forward. No more BSA negotiating sweetheart deals for itself.
3. Asking for $1-2 billion from LCs if the LCs are part of a global settlement. If not and the bankruptcy focuses ONLY on BSA/the "toggle plan", then disregard point #3

As the recent filing noted: ENOUGH. No more negotiation. (Possibly, probably) no more mediation. Sometimes, you just need to litigate this out. Put the judge in the position of having to start making rulings/determinations.

Let me conclude with something an older attorney once told me. We were discussing the idea of judges/courts having calendar and case management (in short, judges set deadlines and schedule case management conferences in order to avoid cases dragging on forever).

He vehemently disagreed with judges having active management of civil litigation. His view was that the role of a judge was like that of a baseball umpire or a ref in a prize fight. The two sides decide when they plan to beat each other to a pulp (prize fight) or play a game (baseball); the purpose of the ref/ump was to show up, get paid, and call balls and strikes or ref the fight.

It is...a view one that modern court administration and management absolutely screams is not the right answer, but from an attorney perspective I get it.

Past a certain point, the judge needs to step up and start putting an end to some of this.

Edited April 25, 2021 by CynicalScouter

[CynicalScouter]

1 hour ago, ThenNow said:

Are the substantive docs expected to land in the docket?

My experience is that normally responses to document demands and interrogatories do not get filed with the court. Select points may show up in later filings.

It's worth noting specifically what is being asked for it

1. First Set of Interrogatories By the Official Committee of Tort Claimants, the Coalition of Abused Scouts for Justice and the Future Claims Representative to [BSA OR Century OR Hartford] in Connection with Estimation Proceedings and
2. First Request for the Production of Documents by the Official Committee of Tort Claimants, the Coalition of Abused Scouts for Justice and the Future Claims Representative to [BSA OR Century OR Hartford] in Connection with Estimation Proceedings

In other words, the focus is going to be on where BSA, Century, and Hartford came up with $650 million as the estimate for abuse payout or whatever.

[TAHAWK]

Is your last point, about "focus," regarding the estimate of counsel as to the settlement value of the claims?

[Eagle1993]

29 minutes ago, CynicalScouter said:

n other words, the focus is going to be on where BSA, Century, and Hartford came up with $650 million as the estimate for abuse payout or whatever.

I think you are correct that it’s the insurance companies that were served.  While Kosnoff is tweeting about BSA and Mediators it looks like he indicated there was discovery coming from the insurance companies.

 

“The mediators Carey, Finn and Gallagher have zero credibility now, if they ever did. They facilitated this outrage in secret and w/o the survivors’ bk lawyers. They simply sold out the victims. They should resign or be fired and no one should ever accept them as mediators again.”

“I’m certain that BSA and it’s team of legal vermin and Chubb and Hartford’s pond scum legal teams and even the disgraced mediators are soiling their BVDs today. Discovery a few hours ago propounded on CB and HIG lawyers. No more talking; no more mediation...”

 

[CynicalScouter]

32 minutes ago, TAHAWK said:

Is your last point, about "focus," regarding the estimate of counsel as to the settlement value of the claims?

Yes, where did $650 M come from? Why not more?

And does BSA have any right/authority to let Hartford off the hook for the low, low price of $650 M?