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

[CynicalScouter]

Speaking of outrageous fees and costs: remember when Century asked that 20% of all fees be put aside to try and control the spending (mostly by BSA lawyers I might add)?

TCC is prepared to set aside 20% of its fees and have them placed in a court-controlled fund until the end of this process. TCC still wants the 10% of its fees (which it has promised will go towards victims) to be left untouched/go directly into a victims fund.

Will BSA do the same? We will see.

• All professionals continue to file quarterly fee applications so that the fee examiner can review and engage with professionals regarding potential reductions.
• After the fee examiner files its report with respect to a professional’s quarterly fee application, BSA shall pay the fees relating to the 20% holdback into a segregated bank account until the Court approves the quarterly fee application, at which time the cash will be held in the segregated bank account until distributed to the professional.
• BSA shall not use the escrowed cash absent further order of the Court after notice and hearing.
• The quarterly fee applications of Pachulski Stang Ziehl & Jones (“PSZJ”) shall have a partial exception to the above procedure so that half of the 20% holdback is paid to PSZJ so that it can continue to fund that portionof its earned fees into a client trust account for the benefit of theSurvivors’ Trust as set forth in PSZJ’s retention application. See [DocketNo. 292-2] at para. 23

[Eagle1993]

36 minutes ago, CynicalScouter said:

First, they've now provided scanned signature analysis showing that some of Proof of Claim forms were clear forgeries. Moreover, they are claiming that they have a whistleblower, ready to testify, that many if not most of the claims are fraudulent. She provided a deposition on May 11.

This  is a very interesting document.  The insurance company makes a pretty interesting claim in here.  Essentially, BSA is attempting to use the $1,500 payout to get the large number of people with false claims to vote for their bad plan.  Essentially, no person with a valid claim would approve BSA's proposal ... so they want to keep the fake claims in the pool as those people would likely jump at the chance to take $1,500 and approve their plan.  This could be the reason why BSA hasn't pushed back at the claims.

Also, it appears there is some questionable tactics.  I have heard the info about lawyers signing off claims (one every 32 seconds).  I never saw the examples where claimant signatures were clearly copied (they show the same signature on two different claimants.  The whistleblower is stating the many people asked to remove their claim or decided not to pursue it but the legal teams told them to tell the person they removed the claim (but actually kept it on the books).

Something interesting ... Kosnoff's own tweets are included in this filing.  

At first, I thought that the reviewing of claims can wait until the the settlement trust pays out (and before insurance payouts).  My reasoning was that it didn't matter to the BSA if it were 10,000 or 84,000 claims ... the payment to the fund would be the same.  However, if there are a large number of false claims and they vote in favor of a settlement where real claimants would have rejected it ... that is an issue that should be addressed now.

[CynicalScouter]

45 minutes ago, Eagle1993 said:

I'll be interested on what they say & do.

I am trying to time this out.

In March, BSA's lawyers told the court they would be out of cash by August. So, let's take them at their word.

Based on the old plan, it was going to take 3 months (April 15 - July 26) to get from the bankruptcy judge allowing the plan to go to a vote AND (assuming the vote successful) final confirmation of the plan.

Now, that would be May 19 - August 29 (assuming everything is set back 34 days).

So, a few things can happen

1. BSA can admit the "we are out of cash by August" was a bluff (let's not say lie) from the start
2. Changing conditions allowed the cash flow to not dry out, so BSA can survive until ???
3. Someone (BSA Foundation?) is willing to offer a bridge loan or some version of "We found cash under the couch cushions"

But that only gets BSA so far. I do honestly believe they will run out of cash at some point, whether that is July, August, or September is TBD.

So, one more can kick in which the plan does NOT go out until after a June hearing by the judge puts BSA in what it had said was an impossible position.

Edited May 13, 2021 by CynicalScouter

[CynicalScouter]

17 minutes ago, Eagle1993 said:

However, if there are a large number of false claims and they vote in favor of a settlement where real claimants would have rejected it ... that is an issue that should be addressed now.

Right, so do you need a vote of ALL claimants? Or all claimants who have a VALID claim?

If you need/want to limit this to all VALID AND VETTED claims, yeah, that is going to take (no joke/hyperbole) years.

And it could a HONEST claim and NOT VALID. For example, should a victim in a state with no lookback window (and thus NO chance for right now at least) get a vote?

I'd say yes because they are surrendering any FUTURE claim if a lookback got enacted, but I can see the legal argument could be that only those with a CURRENT valid claim may vote. I'm not saying it would be persuasive/win the day, but I could see it being lodged.

Edited May 13, 2021 by CynicalScouter

[CynicalScouter]

8 hours ago, RobertCalifornia said:

But, I believe CynicalScouter holds title to esquire.

Bad assumption. Not a lawyer. That said, and suffice to say without giving away my employer(s), I have been inside courtrooms or law firms as a paraprofessional or court staffer most of my adult life.

[Eagle1993]

12 minutes ago, CynicalScouter said:

So, one more can kick in which the plan does NOT go out until after a June hearing by the judge puts BSA in what it had said was an impossible position.

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/85c0d0bc-0fd3-4dc3-ba84-3b94e5e1e475_2964.pdf

If you look at unrestricted cash, I think they are in trouble.  They have $61.7M as of end of April and now they will burn through this cash with little ongoing income (the charters are mostly in as are many HA base fees).  

Now .. .they also list they have unrestricted non cash liquidity and that gets them to $184M.  $184 would buy them another year+.  Then they have restricted funds ... perhaps those could be utilized.

[RobertCalifornia]

I stand corrected. CS is not an attorney, but he obviously has been sleeping at Holiday Inns because he seems like a fast learner.

Two more observations:

1) since we are all anonymous, it stands to reason that some of us could be operatives for insurance companies, BSA,,etc. I’ve seen enough movies to know that insurance companies do not play fair. I’ve seen enough people LIE before Congress at hearings to the point of ridiculousness. Give somebody some money and they will just about say anything.

2) assuming school access and a good fall recruitment, BSA will have income past August. I believe thier new member fee is $25. So, if they could recruit 1 million new members then that is $25 million. Renew some old members and retain some new members at $70 is $70 million from Dec-March. So, they have some income. 

The bankruptcy will have an affect on fall recruitment because the media always covers negative BSA news every year during August and September like clockwork. And quite possibly, the BSA is so under staffed and demoralized at local council levels, they may not even have much of a fall membership drive.

[CynicalScouter]

3 minutes ago, Eagle1993 said:

.they also list they have unrestricted non cash liquidity and that gets them to $184M.

See the aforementioned couch cushions. Yep, August is no real "drop dead" date. It means they'll have to sell/liquidate things in order to keep operating, but they can keep going for awhile. All the while bleeding out funds.

[CynicalScouter]

2 minutes ago, RobertCalifornia said:

1) since we are all anonymous, it stands to reason that some of us could be operatives for insurance companies, BSA,,etc. I’ve seen enough movies to know that insurance companies do not play fair. I’ve seen enough people LIE before Congress at hearings to the point of ridiculousness. Give somebody some money and they will just about say anything.

Do you really think anyone is going to care, on either side of this, to pay someone to post to this scouter forum? To what end? Holy smokes, this is an online chat forum; NO ONE here is both a) persuadable and b) in a position of authority.

But sure. You got me. I'm a BSA operative, but secretly I'm working for the TCC, but that's a cover because really I'm working both sides on behalf of the Illuminati.

Shhhhh!!!

[CynicalScouter]

5 minutes ago, RobertCalifornia said:

So, if they could recruit 1 million new members then that is $25 million.

Never, in the history of BSA, has there been anything like 1 million new recruits. Even in they days of BoyPower 76 (and the fictional/fraudulent units and scouts created to meet quotas) they didn't get 1 million fake/on paper recruits.

So, take that off the table.

7 minutes ago, RobertCalifornia said:

Renew some old members and retain some new members at $70 is $70 million

Right now BSA is at ~750,000, down from 1.2 million. National's fees are $66 and they are going up (yeah, yeah I know the official line is that a fee increase this fall to $72 is only being "discussed", but several councils already let the cat out of the bag).

Assume 50% of scouts (mostly Cub Scouts) who left come back or some other amazingly wide eyed massive influx of scouts, you get back to 1 million.

Again, that would be a never before seen bounce. I don't see it happening and even BSA in its filings has projected that number stay low for the next 2-3 years.

[qwazse]

30 minutes ago, RobertCalifornia said:

I stand corrected. CS is not an attorney, but he obviously has been sleeping at Holiday Inns because he seems like a fast learner.

Two more observations:

1) since we are all anonymous, it stands to reason that some of us could be operatives for insurance companies, BSA,,etc. I’ve seen enough movies to know that insurance companies do not play fair. I’ve seen enough people LIE before Congress at hearings to the point of ridiculousness. Give somebody some money and they will just about say anything.

2) assuming school access and a good fall recruitment, BSA will have income past August. I believe thier new member fee is $25. So, if they could recruit 1 million new members then that is $25 million. Renew some old members and retain some new members at $70 is $70 million from Dec-March. So, they have some income. 

The bankruptcy will have an affect on fall recruitment because the media always covers negative BSA news every year during August and September like clockwork. And quite possibly, the BSA is so under staffed and demoralized at local council levels, they may not even have much of a fall membership drive.

First, we aren't all that anonymous. I've had people, after meeting me IRL, say "Hey, You're Qwazse!" Some of us meet IRL if we're passing through one another's council or are at Jambo. There are lot's of reasons for using a handle. For me, first and foremost, I want people who may know me to feel free to type their mind online. It prepares me for meeting people in the trenches. But, if someone spills details that are truly confidential, their identity will soon follow.

I have no reason to doubt people here are reporting things from the way they see it themselves. BSA, TCC, or any other three-lettered entity would not waste time trying to sway readers here. The BSA pro's who do report here, seem to be doing so out of a desire to spare us or our scouts trauma.

Second, recruitment will get harder as the cost of registration increases. As camps are sold, it gets even harder. A scout whose summer camp moves more than two hours away is less likely to attend. A potential CO is less likely to start a new unit. Those of us who love sinking $ into hiking and camping and watching boys grow strong and good in the span of 7 years will continue to do so. We will just have to figure out the plan B to make it happen.

[SilverPalm]

57 minutes ago, CynicalScouter said:

Bad assumption. Not a lawyer. 

Oh, I didn't realize this either.  I think it speaks volumes to the respect we hold for your work reviewing these documents that many of us did believe you were a lawyer.

[vol_scouter]

1 hour ago, CynicalScouter said:

I am trying to time this out.

In March, BSA's lawyers told the court they would be out of cash by August. So, let's take them at their word.

Based on the old plan, it was going to take 3 months (April 15 - July 26) to get from the bankruptcy judge allowing the plan to go to a vote AND (assuming the vote successful) final confirmation of the plan.

Now, that would be May 19 - August 29 (assuming everything is set back 34 days).

So, a few things can happen

1. BSA can admit the "we are out of cash by August" was a bluff (let's not say lie) from the start
2. Changing conditions allowed the cash flow to not dry out, so BSA can survive until ???
3. Someone (BSA Foundation?) is willing to offer a bridge loan or some version of "We found cash under the couch cushions"

But that only gets BSA so far. I do honestly believe they will run out of cash at some point, whether that is July, August, or September is TBD.

So, one more can kick in which the plan does NOT go out until after a June hearing by the judge puts BSA in what it had said was an impossible position.

When examining the options, understand that it is not just the liquidity to operate for the next few months.  The BSA must file a 5 year business plan with the court that is solid and reasonable.  The assets available must support that plan.  So a plan to double membership in one year with a large, aggressive, national marketing effort would not be reasonable as there would not be the money available for the marketing and doubling membership is not a likely achievable goal.  There is more to the date where the BSA cannot emerge from bankruptcy than just operating funds for the next few months.

[CynicalScouter]

5 minutes ago, vol_scouter said:

When examining the options, understand that it is not just the liquidity to operate for the next few months.  The BSA must file a 5 year business plan with the court that is solid and reasonable.

True. I was thinking short-term/keep the doors open for now situation. You are correct there's got to be a 5 year plan as well.

But is cash flow = $0, as BSA said in court will occur in August, then you are either selling assets/eating your seed corn or doing mass layoffs and not paying day to day expenses.

[vol_scouter]

Just now, CynicalScouter said:

True. I was thinking short-term/keep the doors open for now situation. You are correct there's got to be a 5 year plan as well.

But is cash flow = $0, as BSA said in court will occur in August, then you are either selling assets/eating your seed corn or doing mass layoffs and not paying day to day expenses.

The BSA has had massive layoffs and has only said that it could not emerge from bankruptcy past this summer - not that its cash would = $0.00.