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

[Eagle1993]

https://www.usatoday.com/in-depth/news/investigations/2021/05/10/boy-scouts-of-america-bankruptcy-exit-plan-angers-abuse-survivors/4995280001/

[ThenNow]

26 minutes ago, Eagle1993 said:

https://www.usatoday.com/in-depth/news/investigations/2021/05/10/boy-scouts-of-america-bankruptcy-exit-plan-angers-abuse-survivors/4995280001/

Is this paywalled or locked for anyone? Sent to my family and they can’t get in. 

[Eagle1993]

32 minutes ago, ThenNow said:

Is this paywalled or locked for anyone? Sent to my family and they can’t get in. 

I first clicked on the link from Kosnoff's twitter feed and it worked without payment required but now it is paywalled.  I find incognito mode on the browser sometimes allows access to some articles.  

[yknot]

5 hours ago, CynicalScouter said:

 

1) Remember how BSA and/or LCs lied, saying that local funds would stay local? Nothing would go to be part of the bankruptcy? TCC's taking them to the woodshed for that.

 

 I got a donation request yesterday from council that insisted all funds stay local.

[MYCVAStory]

3 hours ago, CynicalScouter said:

• TCC is out for maximums. 75%+ of council assets.
• Claimants can now gauge. If the TCC thinks that the LC can give up 75% of assets, but the LC says it can only give up 25%, that's one thing. But if the TCC says 75% and the LC says 70%? Is that enough to vote yes for the plan?

The TCC in the meeting last week with the Local Councils (outside of mediation confidentiality) discussed at length how the financial analysis of every Council was individual and intended to allow the Council's credit rating to remain at investment grade AFTER each contributes to the settlement.  As the example in the objection shows, this was a VERY deep dive into each Council.  There was no baseline for contributions across all Councils.  It was independent and done to demonstrate what Councils were able to afford given their significant claim exposure.

[CynicalScouter]

31 minutes ago, yknot said:

I got a donation request yesterday from council that insisted all funds stay local.

At this point any council still saying it knows it is a bald faced lie.

[RobertCalifornia]

31 minutes ago, yknot said:

 I got a donation request yesterday from council that insisted all funds stay local.

I would argue that is mostly true. Regardless of how this bankruptcy goes, the local councils only receive operating income from FOS, camping fees, investments, supply sales, etc. 

FOS funds support annual operations. Those funds are not invested in capital assets and primarily fund the day to day operations and salaries of the nonprofit. Same for any United Way funds that are not specific for some program service. 

[RobertCalifornia]

For the most part, local councils accumulated thier endowments through designated gifts, wills, excess large gifts etc. They built their camps through capital campaigns and land gifts. Many still have mortgages. 

I see the taking of these properties as a reset. Today’s scouts will pay a higher annual registration fee, but it is not more than what is charged by other groups/sports teams that usually only last a few months. 

For the most part, the current participants have invested very little in these camp assets beyond buying a brick or special patch to held build some camp improvements. The big projects are usually covered by large gifts acquired to fund those projects specifically. 

In other words, my camp in the 70-80’s was built before this scout attended and my family had nothing to do with it being there. My $5 annual registration and selling scout show tickets did not make that camp available to me. 

Most camp infrastructure and council investments were large gifts and capital campaigns. So, unless a person has made those types of gifts to your local council, there is not a lot to legitimately fuss. Just keep doing scouting and go build another like others did for us. Or not.

[CynicalScouter]

I know I've said "wow" before, but this latest/last filing is a WOW among WOWs.

The U.S. Trustee has now come in and filed an objection to the BSA plan.

Who is the U.S. Trustee? Basically, the Federal Government and specifically a division of the U.S. Department of Justice.

Quote

The United States Trustee Program is the component of the Department of Justice responsible for overseeing the administration of bankruptcy cases and private trustees under 28 U.S.C. § 586 and 11 U.S.C. § 101, et seq. We are a national program with broad administrative, regulatory, and litigation/enforcement authorities whose mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders–debtors, creditors, and the public.

The short version is that the U.S. Trustee is not even sure if the plan of funneling 84,000+ sexual abuse claims into a settlement agreement is even LEGAL.

Let me repeat that: the U.S. Trustee/Department of Justice is arguing that the entire premise of this entire process (that BSA, the LCs, the COs, the insurers, etc. would all shove money into a settlement fund overseen by a settlement administrator to settle all abuse claims) is flawed, or at least potentially so.

Quote

The  Disclosure  Statement should be amended to explain  why the Debtors believe this Court has the authority and jurisdiction to order the involuntary release  of the personal claims  of creditors—claims  the Debtors could not bring—against the Protected Parties   and their non-estate assets.

And even IF that issue is addressed, there's still the matter that BSA has provided jack squat in terms of information on anything else.

Quote

Despite its length, the Disclosure Statement does not contain the most important information for most creditors: what they can expect to receive and when.

Remember I've said it, the TCC lawyer(s) have said it over, and over, and over again.

Bankruptcy is not about righting wrongs, achieving justice, or anything like that. Bankruptcy is asking two questions:

1. How much
2. When

You've seen me post about "math", that is part #1. This all comes down to a number, and BSA's plan is nowhere NEAR coming up with that number other than $6000, some insurance proceeds, maybe some LC contributions, maybe some other insurance proceeds, etc.

I didn't focus on the "when" because until you figure out "how much", when doesn't matter as much if at all.

Folks, when the Department of Justice is coming into your bankruptcy and saying "It is possibly illegal and definitely lacks enough detail" you know you are completely, totally, utterly lost.

Edited May 11, 2021 by CynicalScouter

[RobertCalifornia]

There has been a great emphasis for healthy local councils to accumulate cash and stock investments as endowments.

Why? Years ago, many councils were almost exclusively funded by community chests....aka United Way. Well, UW funding is no longer strong in many areas. In many cases, the BSA is basically defunded especially for the amount of work that is invested to hope o get those funds. Many dollars have been solicited to build a fund to replace those  dollars. 

A lot of the people who donated the funds are below ground. They won’t be too upset. 

Again anther reset. Unless you are a legacy scouter and your family has donated significantly to camps and financial endowment, then you really can’t fuss much. Rebuild it, or not. 

[CynicalScouter]

Next big question: will the U.S. Trustee make an appearance at the hearing next week? The U.S. Trustee has a standing invitation to address the court anytime it believes a bankruptcy is flawed. They already filed paperwork to that effect; if they show up in person (well, in Zoom), what is BSA going to say? The Department of Justice is wrong? That will not sell well.

If I am the TCC lawyers, I'm finalizing the draft of my (and FCR and Coalition) alternate reorg plan.

• 75%+ of council assets seized.
• 3 if not all 4 HA bases seized (which negates the need to determine if the JP Morgan/Summit shell game was a fraud, just seize it and be done with it)
• The Hartford deal rejected

This just stopped being BSA's bankruptcy and now semi-officially became the TCC's.

[mrjohns2]

9 minutes ago, CynicalScouter said:

This just stopped being BSA's bankruptcy and now semi-officially became the TCC's.

As someone who does want this to get decided already, I don't know if this is a bad thing. The BSA hasn't presented very clear or good offers. So, they had their chance. It's going to be a very deep cut, but what did we think at the start? If the BSA accounting really was that bad for restricted assets, then this is what you get.

[CynicalScouter]

1 hour ago, MYCVAStory said:

It was independent and done to demonstrate what Councils were able to afford given their significant claim exposure.

I guess my question is what that claim exposure is when adjusted for the lack of a statute of limitations lookback window.

In other words, the math looks different in New Jersey, North Carolina, and New York (where there are look backs) vs. say Maryland where there is not.

So, if I am a council with $100 million in claims exposure based on 100 claims (just to keep this easy), I start making adjustments.

25% chance of a SoL lookback window happening.

If a lookback window does occur, not all claims turn into lawsuits. Say, 50% do.

And of those, say 80% the council loses.

$100,000,000 * .25 * .5 * .8 = $10,000,000

So, my expected value is $10,000,000 in exposure. And of this, perhaps insurance covers half, so I am thinking $5,000,000.

So, why should I be selling camps left, right, and center?

Of course in a state with a lookback window it looks different. ($100,000,000 * 1 * .5 * .8 = $40,000,000)

I'm just wondering if the TCC's computations for each Council are based on look back windows being put in place.

What my council Key-3 told us was that their math/the math the Ad Hoc Committee of Local Councils was throwing around included a multiplier for probability/likelihood of a look-back window being approved.

 

[CynicalScouter]

7 minutes ago, mrjohns2 said:

As someone who does want this to get decided already, I don't know if this is a bad thing.

It isn't. If you want this over and done by Thanksgiving, handing the keys over to the TCC is the smart play.

If you want this dragging out for another 2+ years (and that's what happened with some of these Catholic dioceses), let BSA keep driving.

[yknot]

 

 

https://www.beaubidenfoundation.org/

48 minutes ago, CynicalScouter said:

 

The U.S. Trustee has now come in and filed an objection to the BSA plan.

Who is the U.S. Trustee? Basically, the Federal Government and specifically a division of the U.S. Department of Justice.

 

I'm not surprised there might be federal interest in ensuring justice for CSA survivors based on this:

https://www.beaubidenfoundation.org/