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

[Eagle1993]

11 hours ago, ThenNow said:

insinuating that the judge is avoiding the tough calls on a wish and a prayer.

That was my second thought.  My first was hopeful (that perhaps this is a good sign).  My second is that this judge is struggling to make any decision as this is a Sophie’s choice situation.   So, she will wait it out and let fate decide.  Which could mean both groups lose out.  

[DuctTape]

4 minutes ago, Eagle1993 said:

That was my second thought.  My first was hopeful (that perhaps this is a good sign).  My second is that this judge is struggling to make any decision as this is a Sophie’s choice situation.   So, she will wait it out and let fate decide.  Which could mean both groups lose out.  

I have always looked at this situation as both sides WILL lose out. There is no winning here.

[ThenNow]

1 hour ago, DuctTape said:

I have always looked at this situation as both sides WILL lose out. There is no winning here.

My view, admittedly biased but trying to be as objective as possible, is the BSA “gets a win” if it exits with some assets and operating capital to ably pursue its mission. That seems to be its perspective, as well , with or without all of its LCs. That last part makes little sense to me. As a victim/survivor claimant, there is no winning for me in this. I was invited to file a claim for “equitable compensation” and I’d like to see BSA do better with YP. I (and we) have lost too much to call even a reasonably successful outcome a victory. 

[swilliams]

20 hours ago, Eagle1993 said:

I find it very interesting that the judge delayed the trial by almost two weeks.  I wonder/hope it might mean she heard there is progress on mediation. Not sure if that is possible.  Otherwise, it seems a bit odd to delay as BSA is running out of time.  

That would be nice, but I just don’t see BSA suddenly reversing over a year’s worth of foot-dragging and unrealistic view of what they can part with. 

Does anyone think they’ll now agree to sell off the HA bases?  Maybe they’ll try to legally force councils to participate?  I can’t pretend to know, but their past maneuvering makes any new progress seem unlikely. 

[ThenNow]

2 hours ago, swilliams said:

Does anyone think they’ll now agree to sell off the HA bases?  Maybe they’ll try to legally force councils to participate?

This is from other fellas on the thread with years of interaction with National and a view of leadership from their various Scouting roles. Their view, which I’m sure they’ll chime in to confirm or body check me, is that the guys at the top will protect at least Summit with their collective life. Their unwillingness to turn over the JP Morgan docs to prove the alleged restricted status, seems to validate that opinion. 

As to the LCs, I’m not aware of any such leverage. All I’ve heard is they can opt in or end up in court, as applicable to the given location/jurisdiction per the Toggle B Amended Plan. My tuppence.   

Edited May 23, 2021 by ThenNow

[Eagle1993]

2 hours ago, swilliams said:

Does anyone think they’ll now agree to sell off the HA bases?  Maybe they’ll try to legally force councils to participate?  I can’t pretend to know, but their past maneuvering makes any new progress seem unlikely. 

I think BSA would say ... the HA bases along with other unrestricted assets should be decided at trial.  So basically, lets setup the trust and get agreement.  If the judge declares some of the assets are actually unrestricted, those could then go to the trust.  But there is no reason to hold up the bankruptcy for the trial that will take until 2022.

There are actually 2 major players regarding the HA bases.  One is National.  They profit from the HA bases and believe they help recruit/retain scouts.  The other is JP Morgan.  JP Morgan loaned BSA hundreds of millions of dollars, using the HA bases as collateral.  They will argue that the loans must be paid first as they are secured debt.  There is  a chance that at least Summit is upside down on their debt .. possibly other HA bases as well. I'm sure JP Morgan will never willingly give that up unless they lose at trial.  So this is not simply BSA's call. 

If BSA says sell the HA bases, JPM will jump in and say the money must go to them, leaving survivors with almost nothing from the sales.  Personally, I think the Summit loan is legit.  It was far too much money, but it seems like a legit loan.  I do question the loans taken out in the summer of 2019 against the other HA bases, less than 12 months prior to bankruptcy.  There were rumors at the time that those loans were taken out to protect the bases (by creating secured debt).  However others, including many here at scouter.com believed that it actually put the bases at more risk as its hard to argue they are necessary for BSA if BSA is so willing to use them as collateral for operating income.

Only time will tell.  I doubt the HA decision will be rushed so the bankruptcy settlement will have to have  an asterisk that states something about the outcome of the restricted asset trial (which concludes late 2021/early 2022).  Though, I guess there is a chance that JPM, BSA and TCC can meet and work something out earlier.  

[fred8033]

1 hour ago, Eagle1993 said:

I do question the loans taken out in the summer of 2019 against the other HA bases, less than 12 months prior to bankruptcy. 

HONEST QUESTIONS ...

#1  Excluding lender collusion and lender fraud ...  excluding no previously existing rights to the asset .... a secure debt is a secure debt.  The lender has a right to repayment independent of the reasons the borrow took out the loan.  It's easy to question the timing of the loan and even how the loaned money is being used, ... but does any of this affect the status of the secured asset?  

Even then, this seems like a minor point.  The insurance companies seem to be the biggest potential contributor.  

#2  Without insurance claim caps, would the insurance companies be at risk to pay the same claims twice?  Once for BSA liability.  Once for council liability?  Perhaps a 3rd time for CO liability if the insurance was to cover them too?   ...  Without bankruptcy protection, insurance companies could continue to bleed for the same cases.    I understand it depends on when the insurance contract was written ... are there caps ... were both BSA and local councils listed, etc.  ... I'm just wondering if insurance could pay the same victim twice or three times because of different clients (BSA, LC, CO) libel for the same event and the insurance company covering all those libel. 

Edited May 24, 2021 by fred8033

[Eagle1993]

46 minutes ago, fred8033 said:

#1  Excluding lender collusion and lender fraud ...  excluding no previously existing rights to the asset .... a secure debt is a secure debt.  The lender has a right to repayment independent of the reasons the borrow took out the loan.  It's easy to question the timing of the loan and even how the loaned money is being used, ... but does any of this affect the status of the secured asset?  

Even then, this seems like a minor point.  The insurance companies seem to be the biggest potential contributor.  

The question is fraud.  Did BSA do this with the intent of fraudulently protecting assets.  If you noticed, the Coalition hired a lawyer that specializes in fraudulent transfer law.  If it was fraud, JPM will be out of luck.  
 

[ThenNow]

11 USC Sections 548:

(a)

(1)The trustee may avoid any transfer (including any transfer to or for the benefit of an insider under an employment contract) of an interest of the debtor in property, or any obligation (including any obligation to or for the benefit of an insider under an employment contract) incurred by the debtor, that was made or incurred on or within 2 years before the date of the filing of the petition, if the debtor voluntarily or involuntarily—

(A)

made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the debtor was or became, on or after the date that such transfer was made or such obligation was incurred, indebted; or

(B)

(i)

received less than a reasonably equivalent valuein exchange for such transfer or obligation; and

(ii)

(I)

was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation;

(II)

was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with the debtor was an unreasonably small capital;

(III)

intended to incur, or believed that the debtor would incur, debts that would be beyond the debtor’s ability to pay as such debts matured; or

(IV)

made such transfer to or for the benefit of an insider, or incurred such obligation to or for the benefit of an insider, under an employment contract and not in the ordinary course of business.

[fred8033]

2 hours ago, ThenNow said:

11 USC Sections 548:

Thank you.  This will be interesting to see how it plays out.  I can easily see it going either direction.  Showing fraud on one side..  Other side potentially arguing need for cash to pay legal costs and reserves to pay damages to the number of victims projected at the time, less than 2000 at that time.    

[ThenNow]

https://www.wsj.com/articles/many-boy-scouts-victims-find-little-comfort-as-bankruptcy-nears-end-11621854003?page=1

Edited May 24, 2021 by RememberSchiff
tried replacing with non-paywall link. Ugh no wrk

[Eagle1993]

1 hour ago, ThenNow said:

https://www.wsj.com/articles/many-boy-scouts-victims-find-little-comfort-as-bankruptcy-nears-end-11621854003?page=1

Looks like BSA is negotiating with some but not all victims (or leaks to WSJ are simply not consistent).  

"The Boy Scouts have made progress in recent days toward a potential agreement with a coalition of law firms that represents the bulk of the victims who have filed claims ... people familiar with the matter said."

then there is this 

"... the Boy Scouts are farther apart from a separate official committee of survivors, other people said."

Who are the major law firms involved and how do you get to >42,000 without the TCC?  Kosnoff is 17,000 and I don't see him making a side deal.  The coalition is 7,000 and they seemed aligned with the TCC.  Either one of the leaks is not true or BSA is working around the TCC, Kosnoff and the coalition. 

[ThenNow]

In case you can't get to it. Used by permission. 

15 minutes ago, Eagle1993 said:

Who are the major law firms involved and how do you get to >42,000 without the TCC?  Kosnoff is 17,000 and I don't see him making a side deal.  The coalition is 7,000 and they seemed aligned with the TCC.  Either one of the leaks is not true or BSA is working around the TCC, Kosnoff and the coalition. 

Such mysteries lie beyond the reach of my little brain and gumshoe capabilities. 

[ThenNow]

Oops. 

Victims Find Little Comfort 5.24.2021.pdf

[DavidLeeLambert]

On 5/21/2021 at 1:58 PM, Muttsy said:

[...] Chubb's balance sheet does not reflect the toxic liabilities of subsidiary Century Indemnity and Century is now, essentially, insolvent because of BSA claims. 

When ACE purchased Century in 1999, the transaction had to be approved by the Pennsylvania Insurance Commissioner. [...] The PA Insurance Commissioner undoubtedly assumes that Chubb as the parent company of Century will stand behind it and won't [let] it go into insurance insolvency. [...]

Pennsylvania raised the age limit for filing a civil claim arising out of CSA to 55 from 30 in 2018, and is in the process of having a constitutional amendment appear on the ballot that would introduce a temporary look-back window, so as an outsider I would guess that the Penn Insurance Commissioner could be persuaded to weigh in or even investigate.

But with its headquarters there, what kind of tax revenues does Chubb pay to that state? If Chubb could go bankrupt and not even satisfy the $103 billion, leading to no coverage for any of its other policies and thousands of lost jobs, would the State have an incentive to bless whatever internal firewall Chubb had around Century and limit the overall company's losses? Or to argue that other states' look-back windows are unconstitutional or bad policy?