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

[fred8033]

9 hours ago, CynicalScouter said:

Page 46 of TCC's objection alludes to the atom-bomb for LCs. The TCC has been spending big bucks to get financial ...

Wow.   Excluding the world pandemic, many concils are not in that bad of shape.  Yes membership drops, but not as bad as it seemed. 

Perhaps, it is in the best interest of councils to not donate out of the larger BSA bankruptcy and deal with cases as they come.  Some states don't have look backs.  Some councils have fewer cases.  Some councils with larger liabilies already have those liabilities.  

The best interest of councils to stay 100% grounded in being their own separate legal entities.  Let BSA resolve it's own bankruptcy.  The councils should continue to focus on serving youth.  If and when BSA comes out of bankruptcy, the councils can repartner with national.

[Eagle1993]

4 hours ago, fred8033 said:

Perhaps, it is in the best interest of councils to not donate out of the larger BSA bankruptcy and deal with cases as they come. 

Perhaps.  The problem with this.

1)How much will councils be able to pay lawyers to defend against sex abuse cases.  Anyone can sue.  Even outside the SOL window. 
2) As councils start going bankrupt and losing their FOS money and camps, who will donate to other councils?  I personally would hold back donating to my council until after bankruptcy as I would be concerned my donations would be used for lawyers and payouts. Others may feel the same. 
3) How will recruiting and retention go when local media is discussing specific cases of sexual abuse at your local council?  
 

It is a tough call. Is it worth giving up 75% of your assets to avoid years of litigation and bad press.... eventually to give up 75% or more of your assets?

I definitely think this varies by state, number of claims in and outside the SOL.  But even then it’s a tough call.
 

If my council was asked to give up one of their camps, their scout offices and cash ... I would say do it.  That way, I know the camp I work on will exist long term and my donations going forward will be used on scouting. 

[Eagle1993]

7 hours ago, yknot said:

 

 

https://www.beaubidenfoundation.org/

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

https://www.beaubidenfoundation.org/

 

This may actually throw a wrench in the whole process.  I’m not 100% convinced their objection will help abuse victims.  Perhaps, but it looks different than any of the others. 
 

  I did find it interesting that the DOJ lawyer pulled this quote from another case.   
 

noting that “...third party releases are not a merit badge that somebody gets in return for making a positive contribution to a restructuring. They are not a participation trophy, and they are not a gold star for doing a good job. Doing positive things in a restructuring case— even important things— is not enough”

[CynicalScouter]

7 hours ago, yknot said:

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

There is no evidence that Biden personally ordered the U.S. Trustee to intervene or had anything to do with this decision.

[CynicalScouter]

58 minutes ago, Eagle1993 said:

This may actually throw a wrench in the whole process.  I’m not 100% convinced their objection will help abuse victims.  Perhaps, but it looks different than any of the others. 

I think it "helps" in the sense that BSA's effort to try and shove all of this into a Settlement Trust to be fought out over the next decade is over.

I think it "helps" in the sense that it makes it much more likely that, after 1+ year and $100+ million things will start to get litigated and decisions made OR

I think it "helps" in the sense that TCC will put together a plan that will get approved, fast(er).

No more shell games with assets (Summit, Middle Tennessee).

No more screwing around with maybe councils are/are not covered.

No more screwing around with maybe COs are/are not covered.

Just litigate this and be done with it.

Hindsight is 20/20, but since the bar date was set, ALL the relevant LEGAL issues (status of HA bases, status of LC assets, etc.) could have been decided by the judge. Then it would have been math: if the court ruled 3 out of the 4 HA bases were to be sold, then it is just a question of how much they were worth/were sold fo.

[RememberSchiff]

IMHO above all, the BSA wants to remain "in the driver's seat"  no matter what.

So again IMHO, the TCC or any creditor plan seems likely to be dead on arrival.

Will that mean the U.S. Trustee submits another plan or there is a dismissal?

My $0.01,

 

 

[Eagle1993]

Quote

1. As the centerpiece of their Plan,  the Debtors have proposed a complex series of releases and injunctions that will channel their tort liability, along with the tort liability of certain non-debtor affiliates and “representatives” (and, depending on the specific version of the Plan confirmed, numerous other non-debtors) to a Settlement Trust that will become the sole source of recovery for persons asserting abuse claims against the Debtors and other Protected Parties. The proposed Channeling Injunction resembles the injunctions that have historically been featured in chapter 11 cases involving product liability claims for which injuries and claims are expected to arise indefinitely into the future. But as the Debtors themselves seem to acknowledge, the use of such an injunction is novel in a case such as this, which involves only past torts with no latency period. See Disclosure Statement at 44 n.35.

 

Quote

the Disclosure Statement does not identify any legal authority for the Channeling Injunction, nor does the Disclosure Statement attempt to reconcile this relief with the stringent limitations placed by this Court on non-consensual third-party releases. The United States Trustee reserves judgment on whether the Plan ultimately will be confirmable, but the Disclosure Statement should not be approved until the Debtors have at the very least elucidated the legal argument on which they intend to rely.

 

If you take a look at the above, it appears the US Trustee is saying the BSA cannot (as of now) justify any release of liability of insurance companies, LCs or COs.  I then question if the TCC could be given the authority to act on behalf of claimants with councils or COs. Perhaps the TCC now has info that will be used if LCs go bankrupt... but not before then.

If I was abused in the BSA, the liability of National BSA (and their insurance companies) could be covered by this bankruptcy, but I should still be able to to sue Council X, CO Y and individual Z.  I never signed on any agreement with TCC or anyone else to waive my right to sue councils, COs and/or individuals.  How can the bankruptcy of the National BSA impact my ability to sue other independent organizations?

The way I read the US Trustee's 1st and major point ... this bankruptcy can only discuss the debtor and the debtor's assets.  It cannot provide releases of liability to COs or LCs, insurance companies, etc. who are non debtors.  If that is part of the plan, BSA needs to provide the legal basis as to why it should be allowed, and they haven't been able to do that yet.

That is why I am saying it throws a wrench in the whole discussion.  Perhaps a good wrench, but a wrench none the less.  I am not a lawyer, but I'm curious how others read this point.

[Eagle1993]

26 minutes ago, RememberSchiff said:

IMHO above all, the BSA wants to remain "in the driver's seat"  no matter what.

So again IMHO, the TCC or any creditor plan seems likely to be dead on arrival.

Will that mean the U.S. Trustee submits another plan or there is a dismissal?

My $0.01,

 

 

Agreed.  I think the judge should use the US Trustee's objection to:

- Eliminate the CO/LC/Insurance settlement talk ... they are excluded from further discussions.  They are not part of this bankruptcy.  Lift the stay of any lawsuits against these groups.

- Set a timeline to determine HA base status & JP Morgan loan.  BSA .. provide your justification with documentation, or rule that they are non restricted assets and the loan is not secured (JP won't get back 100%).

- Once #2 is done, ask BSA to submit a plan.  Only argument then is how much cash they need to run the operations post Chapter 11.  Should be fairly simple.

 

[ThenNow]

33 minutes ago, RememberSchiff said:

IMHO above all, the BSA wants to remain "in the driver's seat"  no matter what.

So again IMHO, the TCC or any creditor plan seems likely to be dead on arrival.

Will that mean the U.S. Trustee submits another plan or there is a dismissal?

 

By no means my area of the law, but I think they pretty much crashed dad's Caddy without a shoulder restraint or seatbelt. It's totaled. Now we're in the market for a tank they can't wreck. Enter the TCC. No way the BSA SHOULD "remain" anywhere but in the backseat (or in the trunk), at this point. I don't think they should get another at bat. This is ridic.

Edited May 11, 2021 by ThenNow

[CynicalScouter]

41 minutes ago, RememberSchiff said:

IMHO above all, the BSA wants to remain "in the driver's seat"  no matter what.

Past a certain point (the expiration of the exclusivity period) BSA loses that seat. Then it is open to TCC, the U.S. Trustee, any creditor to come up with a plan. And if that plan can get 67% of the sexual abuse victims, BSA has to just lump it.

[CynicalScouter]

15 minutes ago, Eagle1993 said:

- Eliminate the CO/LC/Insurance settlement talk ... they are excluded from further discussions.  They are not part of this bankruptcy.  Lift the stay of any lawsuits against these groups.

- Set a timeline to determine HA base status & JP Morgan loan.  BSA .. provide your justification with documentation, or rule that they are non restricted assets and the loan is not secured (JP won't get back 100%).

- Once #2 is done, ask BSA to submit a plan.  Only argument then is how much cash they need to run the operations post Chapter 11.  Should be fairly simple.

I agree with 90%. BSA is here to get BSA out bankruptcy (Toggle Plan). Trying to get fancy and get the COs and LCs and Insurance covered as well is just not possible.

Timelime is "easy": briefs can be done in 2 months if fast, 3 if slow (BSA in support of its positions, TCC and others in opposition, BSA in reply, then oral argument.

Then, BSA doesn't need to submit a plan as much as it simply amend the existing "Toggle Plan" to put in specific numbers (Philmont, valued at XX) and let it go to the abuse victims for a vote.

[T2Eagle]

The challenge I see with TCC or any other claimants submitting a plan is that while it may be look good to the claimants, if your postings are any indication of TCC thinking the plan will get nowhere with the non jeopardized LCs.  The sample council you posted proposed the council paying in 75% of its assets.  That might look good to a council in NY or CA, but I don't think my council, or a council in TX is going to go along with that.  I remain very skeptical that the LC property can that easily be expropriated.  At a minimum that's a years long slog of litigation before it happens.

As I type this, it also occurs to me that if the LCs are not part of the final resolution what does that do to the claimant pool?  A claimant from a non look back state doesn't really have a legally cognizable claim against BSA, would they even retain their right to vote on a plan that is BSA national only?

2 hours ago, CynicalScouter said:

I agree with 90%. BSA is here to get BSA out bankruptcy (Toggle Plan). Trying to get fancy and get the COs and LCs and Insurance covered as well is just not possible.

Timelime is "easy": briefs can be done in 2 months if fast, 3 if slow (BSA in support of its positions, TCC and others in opposition, BSA in reply, then oral argument.

Then, BSA doesn't need to submit a plan as much as it simply amend the existing "Toggle Plan" to put in specific numbers (Philmont, valued at XX) and let it go to the abuse victims for a vote.

 

[fred8033]

5 hours ago, Eagle1993 said:

Perhaps.  The problem with this.

1)How much will councils be able to pay lawyers to defend against sex abuse cases.  Anyone can sue.  Even outside the SOL window. 
2) As councils start going bankrupt and losing their FOS money and camps, who will donate to other councils?  I personally would hold back donating to my council until after bankruptcy as I would be concerned my donations would be used for lawyers and payouts. Others may feel the same. 
3) How will recruiting and retention go when local media is discussing specific cases of sexual abuse at your local council?  
 

It is a tough call. Is it worth giving up 75% of your assets to avoid years of litigation and bad press.... eventually to give up 75% or more of your assets?

I definitely think this varies by state, number of claims in and outside the SOL.  But even then it’s a tough call.
 

If my council was asked to give up one of their camps, their scout offices and cash ... I would say do it.  That way, I know the camp I work on will exist long term and my donations going forward will be used on scouting. 

A key point is deep pockets.  Having each LC handle their own breaks up the incentive of deep pockets.  Let the cases be handled on their merits and even be grouped at the council level.  But the national scale to combine it all together is just too vast and not controllable.  If I was a LC SE, I'd 100% consider this strategy.  Being lumped in together in one massive negotiation escalates the issues beyond control.

We are not supposed to raise the fees issue here, but the others are arguing about BSA not negotiating in good faith.  That's wrong too.  This is a legal case at this point with legal strategy.  If LCs go on their own, they have less deep pockets that pull national attention.  Some councils will continue with liabilities because of SOL extensions or depth of problem, but many councils can continue and find their own path.

[fred8033]

19 hours ago, ThenNow said:

Detailed the incident. I don't know that the particulars are relevant or is that not what you're asking?

I did not want details.  I was just curious how far the police went.  Interviews?  a real report being filed?  Anyone arrested?  etc, etc.  

If police were pulled in, the police are working with the victims and it's outside scouting control.  I'm betting it was dropped for the same many reasons many cases were dropped.  Not taking it seriously enough.  Right criminal laws not yet in place.  People not understanding nature of abuse.  People satisfied by the person quitting.  People not wanting their family in the center of attention and being labeled victims.   etc, etc.   ... Once police were contacted, I suspect it was handled the same as if it was a church, a school or any other civic organization.  ... In those days, the prosecutions were not there. 

[ThenNow]

33 minutes ago, T2Eagle said:

The challenge I see with TCC or any other claimants submitting a plan is that while it may be look good to the claimants, if your postings are any indication of TCC thinking the plan will get nowhere with the non jeopardized LCs.

Not sure what you mean. LC's aren't voting on the Plan or any Plan.

39 minutes ago, T2Eagle said:

it also occurs to me that if the LCs are not part of the final resolution what does that do to the claimant pool?  A claimant from a non look back state doesn't really have a legally cognizable claim against BSA, would they even retain their right to vote on a plan that is BSA national only?

Not sure I know what you mean here either. The BSA has committed to "equitably compensate ALL survivors of abuse" in Scouting. That's the deal. That's why we're here, open state or no. They invited this and will not have an approved plan without the "closed state" claimants. They invited us, we filed and we are now voting creditor/claimants. So, yes. We retain our right to vote. That time-bar isn't going down as you suggest AT THE LEAST as it related to the BSA portion of the "equitable compensation." The TCC is committed to ensuring ALL victims are compensated. ALL. A. L. L.