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

[ThenNow]

8 minutes ago, CynicalScouter said:

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.

 

6 minutes ago, vol_scouter said:

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.

Why would one preserve fatted calfs, eat the seed corn and starve oneself out of existence?  

[CynicalScouter]

I want to come back around to something in the latest Century objection that I think @Eagle1993hit on but really needs to be explored, namely the $1500 "nuisance" payouts.

Again, because in the end bankruptcy = math, let's use math for a second.

84,000 claimants, you need 56,000 "yes" votes from claimants in order to get an approved settlement BUT that also means it only takes 28,001 to vote "no" and the plan is scuttled.

Now, let's posit that the claims come in 4 types

1. Honest, but not valid. Yes the claimant was really abused, but the claim's not valid because the statute of limitations ran out or I don't have enough details to prove the claim.
2. Dishonest, but superficially valid. The claimant lied, but the claim's superficially valid because it a) provides the minimum details needed and b) is from a state with a lookback window.
3. Dishonest and facially invalid. The claimant lied but it doesn't matter because the claim a) has too few detail to be reviewable and/or b) the state has no lookback window.
4. Honest and superficially valid. The claimant is honest, in a state with a lookback window, and has made a specific and clear claim. It will take months or years to confirm the validity and require additional documentation.

Now, if I am category 4 (honest victim with a superficially valid claim) or even category 1 (honest and maybe someday my state will open up a lookback window) do I as a victim/claimant REALLY want the liars in category 2 and 3 to have a vote here? To grab their  $1,500 and run, potentially approving a LESS beneficial plan?

Century's arguing, in effect, the $1,500 is a BSA bribe to the liars to get them to come along and vote their way just to get this over and done with. The problem is that only gets you so far; if 28,000 claims are from liars who take the money and run, you STILL need at least 28,001 honest claims to push it over the top. BUT those 28,000 liars (if there are that many, again we don't know) may not be able to approve a plan, but they can scuttle the plan.

And we don't know if it is 28 liars, 2800 liars, or 28000.

This is where things have gotten to. What a mess.

[DavidLeeLambert]

On 5/12/2021 at 8:02 AM, CynicalScouter said:

Here's the list for anyone able to stomach it.

I'll admit I haven't read the entire list yet. Some of the accounts are horrible. Many are disheartening. For example:

• A man who basically has to live the rest of his life as a hermit, unable to engage in normal social interactions, as a result of his abuse;
• Men who buried their parents without telling them about the abuse, and only told their wives recently;
• A man who would not let his daughters join Girl Scouts because of his concerns for their safety after his own abuse.

But even in the sample I read, I ran across letters that illustrate this is more complicated than "BSA is bad, and all other organizations were perfect" or "BSA and its COs were bad, and no one else had any fault"...

• A survivor whose abuser was a Scout leader, but was also the Principal of his (elementary?) school; and where the abuse occurred in the Principal's office, during school hours.
• An instance of Youth-on-Youth abuse, at camp, where the abuser was an older but lower-rank boy (new to Scouting), and the victim's own parents were present as volunteers at the camp (but he didn't ever tell them what had happened; and they are now deceased).
• A victim who alleges that his SM and ASM committed horrible crimes themselves, but also that they transported him to Canada to attend Expo '67, and "put him up" at "WMCA" (which I guess is old alternate initials for YMCA or a related organization, like YWCA or YMHA; but it could be a typo, or something totally different), "a facility infested with homosexual men".

And I haven't counted the letters exactly, but it's still in the low hundreds. A very few of the 970-odd stayed state court lawsuits are joint suits by up to a half-dozen or so plaintiffs, but the vast majority are by a single plaintiff.

So the vast majority of the 82550 claims are still fully sealed, and it's still quite possible that the vast majority of the claims, including the vast majority of the "very worst" claims by degree of alleged abuse, have scanty evidence... perhaps no contemporary evidence of the abuse, and no living witnesses other than the alleged victim.  It appears that the actual state-court suits don't even add up to the 1,400 anticipated plaintiffs that certain plaintiff lawyers warned BSA about in late 2019.

[CynicalScouter]

12 minutes ago, vol_scouter said:

not that its cash would = $0.00.

It said cash flow would run out. That's $0.

Quote

The organization has said it needs to exit bankruptcy by August or risk a cash shortage, citing declines in revenue due to COVID-19 restrictions that have closed Scout camps and diminished fundraising opportunities.  

 

Edited May 13, 2021 by CynicalScouter

[CynicalScouter]

6 minutes ago, ThenNow said:

Why would one preserve fatted calfs, eat the seed corn and starve oneself out of existence?  

Because it is clear there's a portion of BSA that is going to defend Summit at all costs, even to the point of losing BSA entirely.

[Eagle1993]

8 minutes ago, vol_scouter said:

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.

I think this is a good point ...

One thing to remember, National BSA will walk away from this (given the current plan) in debt to JPM.  It appears, based on what I can see, the total debt BSA will own JPM is $222.2M (when you add up each of the categories).  It looks like that must be paid off in 10 years? ... I couldn't find a clear payment schedule.

That is over $2M per month (assuming a <4% interest rate).  With 1 million scouts, that is $24/year per scout. Now, there will be income from these properties ... but there is also maintenance, fees, salaries, etc. to support the property.  

I'll be interested to see BSA's business plan including how they pay off this mountain of debt if and when they leave bankruptcy.  

[ThenNow]

16 minutes ago, CynicalScouter said:

Because it is clear there's a portion of BSA that is going to defend Summit at all costs, even to the point of losing BSA entirely.

Yup. Apparently so.

I am not intending to belittle -- this is my comic relief brain, again -- but I periodically run sketch scenarios built on The Office or GetSmart, as I imagine what in the heck the BSA war room looks and sounds like right now. Or, perhaps, "Who's on first...?"

[ThenNow]

24 minutes ago, DavidLeeLambert said:

But even in the sample I read, I ran across letters that illustrate this is more complicated than "BSA is bad, and all other organizations were perfect" or "BSA and its COs were bad, and no one else had any fault"...

Yes, of course, you are right. But I hear the sound of, "Objection, your honor. Relevance?" We are in the BSA's Chapter 11, arrived at by force of child sexual abuse claims in, around, while, during, related to...adults in Scouting.

[CynicalScouter]

14 minutes ago, ThenNow said:

But I hear the sound of, "Objection, your honor. Relevance?" We are in the BSA's Chapter 11, arrived at by force of child sexual abuse claims in, around, while, during, related to...adults in Scouting.

Yes, and here's the "but" I can see one limited instance in which this is relevant.

If the claim is for, say, $1 million based on the TCC or BSA abuse matrix, and it can be shown that the CO's negligence or the LC's negligence accounted for 75%, then the claim vs. BSA (or rather BSA's insurance?) is down to $250,000.

That of course would require a) lengthy determinations as to fault and liability and b) results in BSA National pointing fingers at LCs and COs.

It is no wonder then that the COs are filing objections for the reasons noted: BSA's plans (both the toggle and global) call for the COs to get thrown under the bus and BSA to walk away from anything to do with covering or protecting them.

Edited May 13, 2021 by CynicalScouter

[fred8033]

4 hours ago, CynicalScouter said:

But sure, continue to defend BSA as just trying to do right by the victims with this shell game.

Even if BSA wants to do right by victims, going out in a blaze of glory is never the smart thing.  They have their purpose to continue to serve.  They are balancing multiple factors and different legal advice.  One person's delay is another's negotiation tactic / strategy.  

[fred8033]

3 hours ago, CynicalScouter said:

Here's the thing: she cannot do that sua sponte. As near as I can see, there has never been briefing on the question of what the exact legal status of LC assets are (do they really belong to national? Are they directly subject to the bankruptcy as a result?)

If she is going to rule on that, she'll want and indeed need briefs and oral argument. Since the CO/LC question is not on the May 19 agenda, that means the earliest it could be is June but more likely July for oral argument on the CO/LC question.

LCs and their representatives will weigh in heavy on that.  That one question could take far longer to resolve than trying to decide if high adventure bases are protected.  

[CynicalScouter]

 

2 minutes ago, fred8033 said:

Even if BSA wants to do right by victims, going out in a blaze of glory is never the smart thing.  They have their purpose to continue to serve.  They are balancing multiple factors and different legal advice

No one is talking about blaze of glory. The point is that over, and over, and over again BSA has been asked to prove that the Summit Shell Game is legit and fork over the financials. They are refusing every step of the way.

Give me a break. Some of this may be legal advice, but it is more likely that they are being advised that the MOMENT the financials are released, the Shell Game is over, so stall, stall, stall as long as you have to and hope they can get one over on the court.

That's transparent? That's forthcoming for victims?

[fred8033]

5 hours ago, Eagle1993 said:

The only way BSA gets out quickly is surrendering the bases (or immediately proving they are restricted) and dropping protection for LCs and COs.

If BSA's argument is right that LCs (and COs) are separate legal entities, they can't drop protection.  It's not in their authority.  If BSA's argument is not right, they they are not protected.  It's not in BSA's control to surrender.  

[fred8033]

1 minute ago, CynicalScouter said:

Some of this may be legal advice, but it is more likely that they are being advised that the MOMENT the financials are released, the Shell Game is over, so stall, stall, stall as long as you have to and hope they can get one over on the court.

Yeah, that's legal advice.  You can't split the two. 

[CynicalScouter]

2 minutes ago, fred8033 said:

That one question could take far longer to resolve than trying to decide if high adventure bases are protected.  

There's a short and long question. The short question is really, really short and easy.

The key provision is this in the BSA Charter and Bylaws (and corresponding language in ALL Local Council Charters, Bylaws and/or Articles of Incorporation.

Quote

Upon  termination  of  a  local  council  charter  or  dissolution  of  a  council,  all  rights  of  management and ownership of local council property shall become vested  in  the  National  Council  for  use  in  accordance  with  the  Rules and Regulations of the Corporation. Local council articles of incorporation and bylaws shall include or be revised to incorporate this provision at the time of chartering or the next charter renewal.

Short question: Does this mean that National can on its own volition (or by order of the court) revoke all local charters and seize assets as part of the bankruptcy? If no, end of conversation. If yes....

Longer question: Will the court order/direct the charter revocations and asset seizures?