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

[CynicalScouter]

Just now, vol_scouter said:

The BSA attorneys are supposed to be among the best in this area of law so they have reasons.

That's laughable. Again, 1 hour and a PDF printout would prove this is a valid debt and not a shell game.

The fact that they are spending THOUSANDS in lawyers fees fighting the sexual abuse victims from even being able to SEE these purported debt documents tells me all I need to know.

[CynicalScouter]

2 minutes ago, vol_scouter said:

The BSA has been making payments on the debt.  Why if there was no loan?  Please let us know where the money came from and why the BSA is making large debt payments.

Really? According to who? BSA? You've seen evidence and documents to this effect?

That's is ALL that the sexual abuse victims are asking for from BSA. PROVE there is a real debt. PROVE where those payments have been going. PROVE that the loan is real.

And BSA won't answer. Instead, they object to the sexual abuse victims even asking the question/having a judge review the documents.

This REEKS of shell game. And it wouldn't be the first time. Read up on how when the Archdiocese of Milwaukee diocese got sued for sexual abuse, they played a shell game (there, transferring money to a "cemetery fund" called the Cemetery Perpetual Care Trust).

The Fifth Circuit Court of Appeals smacked down that shell game in March 2015. https://www.nytimes.com/2015/03/10/us/wisconsin-cemetery-fund-not-protected-from-creditors.html

By August 2015, the Archdiocese was forced to settle with the abuse victims. And guess where some of the money came from? You guessed it: the Cemetery Perpetual Care Trust. https://www.bizjournals.com/milwaukee/news/2015/08/04/archdiocese-of-milwaukee-reaches-21m-settlement.html

 

 

[vol_scouter]

3 minutes ago, CynicalScouter said:

Really? According to who? BSA? You've seen evidence and documents to this effect?

That's is ALL that the sexual abuse victims are asking for from BSA. PROVE there is a real debt. PROVE where those payments have been going. PROVE that the loan is real.

And BSA won't answer. Instead, they object to the sexual abuse victims even asking the question/having a judge review the documents.

This REEKS of shell game. And it wouldn't be the first time. Read up on how when the Archdiocese of Milwaukee diocese got sued for sexual abuse, they played a shell game (there, transferring money to a "cemetery fund" called the Cemetery Perpetual Care Trust).

The Fifth Circuit Court of Appeals smacked down that shell game in March 2015. https://www.nytimes.com/2015/03/10/us/wisconsin-cemetery-fund-not-protected-from-creditors.html

By August 2015, the Archdiocese was forced to settle with the abuse victims. And guess where some of the money came from? You guessed it: the Cemetery Perpetual Care Trust. https://www.bizjournals.com/milwaukee/news/2015/08/04/archdiocese-of-milwaukee-reaches-21m-settlement.html

 

 

So you cannot provide a source of the funds to purchase the Summit.  At prior National Annual Meetings (NAM), the debt and payments where in some of the documents provided to some committees.  While I cannot speculate as to why these attorneys considered among the best in the field are taking this tact, you are not able to provide any reasonable manner that the BSA could have paid for the Summit and reported on debt payments at NAM.

Even in shell games, someone must supply the money that is moved around.  In this case, it seems to be J. P. Morgan provided those funds that the BSA is trying to pay off.

[CynicalScouter]

26 minutes ago, vol_scouter said:

So you cannot provide a source of the funds to purchase the Summit. 

I believe money went to pay for something. Money went somewhere.

What I don't believe is anything BSA is saying about where the money went and what the real status of Summit is.

As I said: 1 hour and a PDF bank statement reviewed by the judge would fix this entire problem.

Or do you not trust federal judges to look at a bank statement? You'll just think and believe whatever BSA tells you to think and believe at this point?

26 minutes ago, vol_scouter said:

At prior National Annual Meetings (NAM), the debt and payments where in some of the documents provided to some committees.

And after all this, you just believe whatever you are told?

Don't question BSA.

Don't doubt BSA.

Do what BSA tells you.

Think what BSA tells you to think.

When an organization goes this far out of its way to refuse to release a simple bank statement for external review by a federal judge, you still trust BSA? Still believe BSA?

Seriously?

26 minutes ago, vol_scouter said:

While I cannot speculate as to why these attorneys considered among the best in the field are taking this tact,

I can. The lawyers know the MINUTE that BSA is forced to turn over the financial documents related to the JP Morgan/Summit claim to the judge, the shell game is over.

If these lawyers are smart they know that the ONLY way to keep the shell game going is to never, EVER let the judge see the financial statements. The second she does, it is over. She can (and likely would) terminate the bankruptcy or side entirely in favor of the sexual abuse victims.

Remember: the burden is on BSA (as debtor) to PROVE their financial statements are valid and accurate. The fact that they are hiding this is no doubt getting the judge's attention. She's going to start to wonder why, if BSA is so honest, it won't turn over the financial statements to her.

Edited May 1, 2021 by CynicalScouter

[vol_scouter]

2 minutes ago, CynicalScouter said:

I believe money went to pay for something. Money went somewhere.

What I don't believe is anything BSA is saying about where the money went and what the real status of Summit is.

And after all this, you just believe whatever you are told?

Don't question BSA.

Don't doubt BSA.

Do what BSA tells you.

Think what BSA tells you to think.

When an organization goes this far out of its way to refuse to release a simple bank statement for external review by a federal judge, you still trust BSA? Still believe BSA?

Seriously?

As someone who personally knows most of the upper management and executive board of the BSA, yes, I believe that they are honorable men and women who have hired the best attorneys to represent the BSA that they could find and are following the advice of counsel.

The BSA is paying for the best attorneys available and follow their advice.  Why the course is not something that is clear.  The BSA would be foolish to not do as they are advised.

You cannot provide where the money originated to purchase and prepare the Summit for the first National Jamboree.   My memory is that J. P. Morgan provided that money and that the BSA is paying it off.  Until you can provide other factual information, I see no reason to not believe the BSA.

[Eagle1993]

BSA likely doesn’t want to show Summit as it will prove what we all know.  It was and is a giant pit where they threw and continue to throw money into and is likely worth less than the debt owed.  Give it to the TCC along with the debt assigned to it.  BSA would be better off. 

[CynicalScouter]

7 hours ago, vol_scouter said:

You cannot provide where the money originated to purchase and prepare the Summit for the first National Jamboree. 

In a bankruptcy, the burden is on the debtor (BSA) to demonstrate it is operating openly and honestly regarding its finances.

BSA is deliberately trying to hide information about the precise status of Summit, the debt for Summit/Arrow, WV, and where all the money went.

I suspect it is one of two things:

1) SOME money went to pay down Summit/Arrow, WV debt. SOME. Where the rest went? Let's see the financials. That is ALL the sexual abuse victims are asking for.

2) The theory @Eagle1993just mentioned: ALL the money went to pay down Summit/Arrow, WV and has proven to be an unmitigated financial disaster that BSA does not want known.

Theory #2 actually weighs in FAVOR of BSA being (half) honest: YES indeed ALL that money went to pay down Summit/Arrow, WV debt...but Summit is underwater/negative equity.

Either way, neither is a valid (legal) excuse for withholding this information from the sexual abuse victims and/or a federal judge.

[ThenNow]

9 hours ago, CynicalScouter said:

Instead, they object to the sexual abuse victims even asking the question/having a judge review the documents.

"The lady doth protest too much, me thinks."

Edited May 1, 2021 by ThenNow

[CynicalScouter]

1 minute ago, ThenNow said:

"The lady doth protest too much, me thinks."

Right, this is what frankly confuses me.

TCC/FCR is simply asking that JP Morgan and/or BSA produce documents showing that in fact there is a valid debt/lien/note against Arrow, WV and or its sole asset (Summit) and that the debt/lien/note was not entered into fraudulently.

This is easily solved with a PDF of the note agreement and a PDF of the last/latest financial statement sent to the parties with a CC to the judge. They could even redact things like the account numbers so the people cannot access that (Rule 5.2).

Bing, bang, boom. Done.

Instead we get thousands (tens of thousands) of BSA dollars spent trying to keep the exact financial status of Arrow, WV/Summit secret from the abuse victims and the judge.

And I am simply left to wonder: why?

[ThenNow]

25 minutes ago, CynicalScouter said:

And I am simply left to wonder: why?

As I've watched the back and forth on this - and I do believe it is a hinky deal or they wouldn't be so coy - I was thinking about the broader context of a case like this. Companies that go into Chapter 11 because of mass tort liability, and not basic financial and economic stress 101, have a dual dilemma. They have to fend off and financially respond to the mounting tort liability AND they have to show their books. Books that may be wonky, but no one really knew about it because they were bumping along down the road in a relatively stable condition. Now, they are forced to undress the financials in public, along with stand in the heat of the tort liability. The exposure of questionable financial management alone is very humbling.

Reading the court documents surrounding this issue, it's clear to me the undercurrent of the TCC's niggling over the BSA's asset disclosures includes commingling, failure to sequester and repeated self-designation of "restricted" assets not backed up by legal and accounting reality. This is part of a larger picture. Summit is just the current focus. 

Edited May 1, 2021 by ThenNow

[Eagle1993]

Just reviewed monthly filings from BSA on their cash over the last year.

End of Month -  Unrestricted Cash
Apr-20              $116,140 
May-20             $117,303 
Jun-20             $112,281 
Jul-20           $101,059 
Aug-20        $82,249 
Sep-20     $68,863 
Oct-20     $67,630 
Nov-20     $65,534 
Dec-20     $61,690 
Jan-21     $52,467 
Feb-21     $66,228 
Mar-21     $40,724 
Apr-21     $49,852 
 

 

 

[CynicalScouter]

1 hour ago, ThenNow said:

repeated self-designation of "restricted" assets not backed up by legal and accounting reality.

This is the key. There is a TON at the BSA and LC level of "this asset is restricted" and when asked to demonstrate how/why, the answer is "because we said so."

That is not how this is going to work.

[ThenNow]

14 minutes ago, CynicalScouter said:

This is the key. There is a TON at the BSA and LC level of "this asset is restricted" and when asked to demonstrate how/why, the answer is "because we said so."

That is not how this is going to work.

I have a little bank account among our others that's titled, "Misc. Stuff" in our online lineup of accounts. I made the mistake of letting the paper statement get into my wife's hands a few months ago. Thank you, Covid. She never got the mail before this. Some things should be sacred. Anyway, she looked at the list of smallish charges. Nothing big, some gun stuff, something for the cabin, something for one of my siblings, a book, some workout bands, and, etc.

"What's this?" says she, holding up the few pages. "Why aren't WE using a card toward AmEx, American, Marriott, Hilton...points?"

"I've always had this as just a little squirrel away money for small stuff," I defend. Poorly.

"So, you're using this account as a slush fund," the rebuff comes.

"No. it's just my little side stuff. Nothing big." Again, weak. Now fading.

"It's your slush fund. Don't deny it."

"Give me that and stop getting the mail, woman..."

"I'm watching you, mister..."

Case closed. 

Edited May 1, 2021 by ThenNow

[Eagle1993]

21 minutes ago, Eagle1993 said:

Just reviewed monthly filings from BSA on their cash over the last year.

End of Month -  Unrestricted Cash
Apr-20              $116,140 
May-20             $117,303 
Jun-20             $112,281 
Jul-20           $101,059 
Aug-20        $82,249 
Sep-20     $68,863 
Oct-20     $67,630 
Nov-20     $65,534 
Dec-20     $61,690 
Jan-21     $52,467 
Feb-21     $66,228 
Mar-21     $40,724 
Apr-21     $49,852 
 

 

 

There are a lot of details in the monthly reports.  Basically, you can guess the big cash inflows are Sept/Oct (registrations), Jan - March (Charters + High Adventure Bases).  There are some big outflow months as well (insurance payments).

June - September is essentially a cash burn for BSA.  Last year was a $44M burn.  Last year they spent less on bankruptcy lawyers than they are now.  Plus not sure how HA base changes will impact burn.

Looks like we will almost be out of Cash by September.... but I think they can limp until the end of the year ... BSA won't last 2022 in bankruptcy.

 

 

Edited May 1, 2021 by Eagle1993
updated with correct numbers

[CynicalScouter]

14 minutes ago, Eagle1993 said:

Looks like we will almost be out of Cash by September.... but I think they can limp until the end of the year ... BSA won't last 2022 in bankruptcy.

BSA's lawyers told the court August was the out-of-cash date.

Edited May 1, 2021 by CynicalScouter