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

[CynicalScouter]

32 minutes ago, ThenNow said:

So, the SE manages the DEs. What are the layers of management overseeing the SEs? 

Here's where things get complicated.

The Local Council Board hires the SE, however until recently (3 years? 4? in that range) the Local Council Board could only select from a list of people approved by National ("commissioned"). In order to be on that list, you had to have a certain amount of prior work and experience within scouting, working from from DE, etc. In the last 3-4 years they change the policy to allow SEs to be hired from the "outside world" directly into the SE position, but the SE has to complete certain training and education programs within the first year of employment.

Once hired, the SE remains for 3-4 years and can then stay on so long as the Local Council President is happy. The SE can be terminated ONLY by the Local Council President. There was a council board that attempted to circumvent this decades ago by voting to oust an SE. Again, because only the Council President can fire, the SE won his wrongful termination suit.

National cannot take any hiring/firing/personnel action as to SEs BUT they/National did hold a trump card of sorts. Remember how I said all SEs had to be "commissioned" by National (meaning met National's standards for Professional Scouters?) In theory, the chief Scout executive (Mosby) could revoke that person's commission. Because holding that commission is a condition employment by the LC, that ends the SE's tenure. I've heard fourth-hand rumors of this having been done in the past, in some far away council, but I've never seen it or directly heard of it. But it is possible.

This is, again, why the LCs insist and will keep on insisting they are separate, autonomous, and independent of national in general and with regards to the bankruptcy in particular.

Edited May 29, 2021 by CynicalScouter

[CynicalScouter]

A followup: in answer to a story that Heart papers ran about 10 years ago about BSA and LC, Scout Executive Compensation, etc. BSA National put out this; the entire document goes through (in various places, it is interspersed with other things) the SE process. Key graph.

https://filestore.scouting.org/filestore/pdf/QAHearstmemoedited1-27-09.pdf

10. Please tell us how scouting executive jobs are awarded in local councils nationwide? Must executives be chosen from another council? If so, why is that? Are there any time restrictions for how long an executive can serve within a council? If so, why are such rules in place?

Scout Executives are selected by the local volunteer executive board from a list of qualified and approved candidates. Only Scout Executives, who are the local council’s CEO, must come from outside the council.Other professional scouting executive positions may be promoted from within the council. There is no time limit for an individual to hold a professional position at any level.The BSA is a unique organization and believes that in order to effectively serve as the CEO of a local council, it is important for professionals to have diverse and rich experiences within the BSA.

Edited May 29, 2021 by CynicalScouter

[ThenNow]

16 hours ago, CynicalScouter said:

I'd say abuse by a DE, SE, or other official BSA employee makes the claim double if triple strong why? Because with a volunteer, you have to wedge in issues related to principle/agent, retention, supervision, etc.

With an outright employee? Yeah, you don't need to try to decide if BSA or the LC was suppose to have direct supervision, etc. It's clear: this person's your employee. You should have.

I'm relatively new to the BSA CSA litigation arena and will further expose my ignorance. Of the cases that have been brought and resolved, whether award or settlement, were all, some or none of them Doe v. both BSA and LC as jointly and severally liable parties? 

Edited May 29, 2021 by ThenNow

[CynicalScouter]

29 minutes ago, ThenNow said:

Of the cases that have been brought and resolved, whether award or settlement, were all, some or none of them Doe v. both BSA and LC as jointly and severally liable parties? 

I think I've seen almost every permutation. Part of the challenge with this is that since BSA promised (or should I say "promised") to extend insurance to the LCs and COs, the CLAIM may have been joint and severable but the settlement from BSA covered all.

I know of several cases where BSA was able to shove everything onto the Local Council or claim that responsibility ended with the LC. The Oregon case was the most famous and critical.

Everyone recalls that 2012 the Oregon case ended with the jury awarding $18.5 million punitive judgment against the Boy Scouts of America, the largest ever by far against the organization in a sex case jury trial. The Local Council (Cascade Pacific) was also hit with damages. The Oregon courts also directed the release of the IV files, or at least some.

But...there's the rest of the story (sorry Paul Harvey).

BSA had won in Oregon. In 1997 they successfully argued that

Quote

The court of appeals affirmed and found that [victim redacted] failed to state a claim under the doctrine of respondeat superior because [abusive scout leader] was not acting within the scope of his employment when he sexually assaulted [victim redacted]

Cascade Pacific Council, however, was still stuck.

That's why BSA figured it was going to be AOK in 2012: every indication and all case law (or almost all) previous had said that BSA National was not liable, had no role or oversight, etc.

It was only later in other cases coming AFTER the IV files were released in 2012 that BSA started losing over and over because they could no longer claim "We didn't know." or "We had no control" They knew. The fact that they held the files showed control. They were negligent. And they are going to have to pay.

Edited May 29, 2021 by CynicalScouter

[Muttsy]

Love the Paul Harvey reference …but you date yourself CS!

re Oregon law of Respondeat Superior (which is unique in the US), the 1997 case is not good law. It was superceded by the Fearng/Buecher cases in ~2001 which recognized “mixed motive” situations and held it was ultimately a fact question for the jury. That’s significant because the jury was going to hear all the evidence even if it ultimately imposed liability based on negligence not on RS. 
 

BSA lawyers blundered massively taking a case like Kerry Lewis to a jury in Portland, particularly after the court had ruled the IV files admissible. The outcome was almost a guaranteed result. I could go on about other blunders like going to a jury trial in a jurisdiction with uncapped punitive damages (also rare as hen’s teeth). 
 

I checked with a lawyer friend who has handled numerous scout cases. She says she’s never seen BSA settle out a case without the LC  “There’s never any daylight between National and the LC in the defense of these cases.”

“A different story” for the CO. She pointed out that LDS settled out in the Portland case before trial. The Mormon Church had a smarter lawyer apparently. 

[CynicalScouter]

7 minutes ago, Muttsy said:

I checked with a lawyer friend who has handled numerous scout cases. She says she’s never seen BSA settle out a case without the LC  “There’s never any daylight between National and the LC in the defense of these cases.”

I'd defer to you then. I do seem to recall older cases in OR and VA where BSA National was found to not be liable BUT the LC was. That however may have been fact patterns unique to the cases.

[ThenNow]

1 hour ago, Muttsy said:

“A different story” for the CO. She pointed out that LDS settled out in the Portland case before trial. The Mormon Church had a smarter lawyer apparently.

So, if BSA or an LC has knowledge of abuse, is it their duty to advise the CO? I’ve learned here that the COs have a much more active role and measure of oversight than I ever saw with ours. Is it imputed, regardless their actual knowledge or involvement?

[CynicalScouter]

29 minutes ago, ThenNow said:

So, if BSA or an LC has knowledge of abuse, is it their duty to advise the CO? I’ve learned here that the COs have a much more active role and measure of oversight than I ever saw with ours. Is it imputed, regardless their actual knowledge or involvement?

Here's the problem and the biggest open secret of BSA in all my years and I guess going back for decades before me.

1) MOST Chartered Organizations couldn't give a rip about what was going on in these units. They signed the papers once a year and went on about their business. If you were to ask the local VFW Hall in East-Wherever South Dakota that chartered a Pack "Do you know what you are committing to?" their leadership would say no. This was just something some guy wanted to do for his son's or grandson's Pack and yeah, sure, we'll sign once a year and let them use the hall once a month.

2) Try to keep in mind that the chartering process was and is considered local and autonomous. The fact that the VFW Hall in East-Wherever South Dakota chartered a Pack has NO bearing in any other VFW. These chartering organization's INSTITUTIONS don't give a rip either.

3) LDS is the big, giant, glaring exception. They ran their units and treated BSA as their own, personal, youth development program, so much so that to be a youth or adult leader in LDS chartered units, you also had to be a youth or adult leader in the LDS church. That caused some problems back when LDS did NOT allow African-Americans to serve as leaders and a young African-American man tried to become senior patrol leader. The entire Varisty Program was, in effect, LDS' way to get youth sports on their terms.

3.5) I'd be remiss if I didn't also note the Methodists were also at an institutional level heavily involved in scouting. They were the #2 chartering org. prior to LDS leaving. Now, they are #1.

4) Imputed knowledge? That's such a tough legal call. We can look at the charter agreements that the COs signed and say "yeah, sure, the CO knew or should have known". They said they would, at any rate, keep an eye open and run these programs. They didn't.

Again, not to be a broken record, but so many COs just really, really looked at this as "We are just giving them a hall for free." They had NO idea that they were signing up to take responsibility, both legally and financially. AND they were told over and over that BSA would take care of EVERYTHING including insurance.

Yeah. About that insurance....

There's a reason why LDS and the Methodists have AS INSTITUTIONS come into this bankruptcy and thrown up objections; they and their member churches are potentially so, so, so in a world of hurt here.

So, in short, whatever legal position can be shown that would impute knowledge by the CO of what is going on, on the ground I would hazard a guess that the actual leaders of these COs had no clue whatsoever what was going on.

And most still don't.

Edited May 29, 2021 by CynicalScouter

[yknot]

53 minutes ago, CynicalScouter said:

Here's the problem and the biggest open secret of BSA in all my years and I guess going back for decades before me.

1) MOST Chartered Organizations couldn't give a rip about what was going on in these units. They signed the papers once a year and went on about their business. If you were to ask the local VFW Hall in East-Wherever South Dakota that chartered a Pack "Do you know what you are committing to?" their leadership would say no. This was just something some guy wanted to do for his son's or grandson's Pack and yeah, sure, we'll sign once a year and let them use the hall once a month.

2) Try to keep in mind that the chartering process was and is considered local and autonomous. The fact that the VFW Hall in East-Wherever South Dakota chartered a Pack has NO bearing in any other VFW. These chartering organization's INSTITUTIONS don't give a rip either.

3) LDS is the big, giant, glaring exception. They ran their units and treated BSA as their own, personal, youth development program, so much so that to be a youth or adult leader in LDS chartered units, you also had to be a youth or adult leader in the LDS church. That caused some problems back when LDS did NOT allow African-Americans to serve as leaders and a young African-American man tried to become senior patrol leader. The entire Varisty Program was, in effect, LDS' way to get youth sports on their terms.

3.5) I'd be remiss if I didn't also note the Methodists were also at an institutional level heavily involved in scouting. They were the #2 chartering org. prior to LDS leaving. Now, they are #1.

4) Imputed knowledge? That's such a tough legal call. We can look at the charter agreements that the COs signed and say "yeah, sure, the CO knew or should have known". They said they would, at any rate, keep an eye open and run these programs. They didn't.

Again, not to be a broken record, but so many COs just really, really looked at this as "We are just giving them a hall for free." They had NO idea that they were signing up to take responsibility, both legally and financially. AND they were told over and over that BSA would take care of EVERYTHING including insurance.

Yeah. About that insurance....

There's a reason why LDS and the Methodists have AS INSTITUTIONS come into this bankruptcy and thrown up objections; they and their member churches are potentially so, so, so in a world of hurt here.

So, in short, whatever legal position can be shown that would impute knowledge by the CO of what is going on, on the ground I would hazard a guess that the actual leaders of these COs had no clue whatsoever what was going on.

And most still don't.

I'm not sure it's a secret. I think it was a conscious decision on the part of BSA not to address this because it would have resulted in a loss of membership. As far as LDS, I count that as one of BSA's leadership failures. They should never have allowed an organization to create a program within a program. BSA was not the LDS church, but the situation resulted in the BSA adopting many LDS positions that warped or outright paralyzed BSA in it's efforts to run a nationally focused organization. 

[Muttsy]

Patrick Boyle's 1992 book Scouts Honor is essential reading to understand how it all came to this. It was the institutional instinct to conceal, minimize and deny. 

 

"By dealing with  these cases as a series of unrelated events rather than as a pattern, the Boy Scouts of America was  behaving  just  like  Carl:  minimizing,  rationalizing, assuring itself it had no problem. "The Scouts believed their own image. They believed their own publicity," says Mike Rothschild, a California attorney who represented an abused Scout.34

No  one,  therefore,  reported  the  cases  to the  BSA's health and safety committee, which routinely got reports on injuries  and deaths  at Scout  functions.  When Scouts got hurt or killed while boating, the committee developed rules to make boating safer. During America's Bicentennial cel­ ebrations, the committee  studied  whether  the gunpowder used by troops in some ceremonial muskets was dangerous. But Dr. Walter Menninger, a psychiatrist  who headed the Menninger Foundation in Kansas and who chaired the committee, says he did not believe sex abuse was a problem in Scouting because no one had informed him of any cases.

Thus uninformed, Menninger sat in a 1987 deposition for lawsuit filed by an abused Scout and declared, "There is a greater threat to Scouts of drowning and loss of life from accidents than there is from sexual abuse by a Scoutmaster."

In fact, BSA reports show that sex abuse is more common in Scouting than deaths or serious injuries. From 1971 through 1990, an average of 13 Scouts died during Scout activities each year, and 30 suffered serious injuries, defined by the Scouts as life-threatening or requiring hospitalization of at least 24 hours." For each of those years, however, the BSA banned an average of 67 adults suspected of abusing Scouts." The number of their victims is higher although there is no exact figure. Even without knowing this, Menninger's committee tried to grapple with sex abuse. Committee members wanted to educate Scouts about abuse or teach leaders how to respond when a boy said he'd been abused. Here they ran into a roadblock: religion. Religion is a cornerstone of Scouting. Reverence to God is in the Scout Law, and about half of the sponsors of Scout units are religious organizations, mostly churches.. The BSA could ill afford to offend them. Menninger, noting the "exquisitely sensitive nature of the relationship" between the corporation and sponsors, explains the dilemma: "There are a number of sponsoring organizations, particularly the LDS Church, the Mormon Church, that have made it quite clear they want the Scouting, outing, advancement programs as part of their youth program, but they want issues of moral, sexual aspects to be strictly part of the church's teaching."Churches, Menninger says, "have a  substantial percentage of registration [of Scouts1and become a much more potent factor." As a result, the BSA "focused away from some of these specific sexual areas."

[CynicalScouter]

20 minutes ago, Muttsy said:

And I don't see that happening, at least not in the time allotted by this rapidly collapsing bankruptcy case.

Right, and this is what shocks me about the recent NAM and the near-constant din of "the bankruptcy is almost over." Almost over? Just because BSA claims (and I say claims) it is going to be cash poor in August doesn't make it so and doesn't mean that the TCC or others are going to accept this. The judge is scared of BSA dying from cash loss, but since November at least the mediators appear to have done nothing more than dawdle.

Other than the bar date and the contents of the notification, NO issue of substance has been ruled on one way or the other. June 4 is the next "big date". We know that, mathematically, it is now impossible for BSA's reorganization plan to be sent out for a vote, approved (it won't be, but just pretend for a second) and confirmed by August 31.

Also, and correct me if I am wrong, but I seem to recall that the March 2021 agreement to allow the automatic stay due to bankruptcy in state proceedings is set to expire in July (the March agreement allowed suits to be filed because of statute of limitations issues, but not proceed).

The count in March was 900+ lawsuits, active and filed. Lookback windows are closing in NY and elsewhere. Wild guess here: the number of cases filed is now 1,500. If you told me 2,000 or 3,000, I wouldn't be shocked.

And oh, by the way, Arkansas just enacted a bill to allow claims of victims up to age 55. That's another potential 800-900 suits.

"Rapidly collapsing" sounds right.

And I still cannot figure out how you get to 2/3rds "yes" of abuse victims anytime soon. I mean unless some mega-omnibus agreement is reached, which stranger things have happened, but with so many parties and pieces (LCs, COs, and Chubb/Century indicating that they will drag this out a thousand years if they have to, etc.)

Forget August 2021; I'd take odds on August 2022, by which point BSA's bled out all its cash.

Edited May 29, 2021 by CynicalScouter

[Muttsy]

My guess is BSA knows it has to go with the TCC/Coalition/FCR plan which will allow BSA to emerge from chapter 11 in exchange for $2-3B in cash and LC real estate plus all the insurance assignments go in to a post-confirmation Settlement Trust. The CO's They can contribute a "reasonable" amount and get releases. The mediation discussions last week and next a probably focused on how much BSA and selected councils are going to kick in. It has to be substantial if they want to get the 2/3rds of votes cast. 

Those that don't can take their chances in the tort system or settle out with the Settlement Trustee down the road. 

The same could apply I suppose to the LC's that don't contribute. They will face their own bankruptcies and probable liquidations  in short order. 

[CynicalScouter]

4 minutes ago, Muttsy said:

My guess is BSA knows it has to go with the TCC/Coalition/FCR plan which will allow BSA to emerge from chapter 11 in exchange for $2-3B in cash and LC real estate plus all the insurance assignments go in to a post-confirmation Settlement Trust.

Is it reasonable to believe 2/3rds of abuse victims will approve a plan where a big piece (insurance assignments) remain a big, giant question mark?

In other words, my read is there are 4 sources for the Settlement Trust:

1) BSA National. I assume a TCC/Coalition/FCR deal will specifically state the amount OR items to be placed into the trust (cash worth X, High Adventure properties valued at Y, other items worth Z).

2) Local Councils. I assume again a similar specific amount (cash worth X, camps worth Y, other items worth Z). This MAY be 1 number, or it could be up to 240 different numbers, one for each participating LC.

So far, we've got quantifiable numbers. A victim can vote knowing this data. But not

3) CO contributions

4) Insurance for all the above.

Because those are not even close to being near a number (at least based on public info).

Moreover, would  $2-3B in cash and LC real estate + "insurance and CO contributions, TBD" be enough?

$3 billion sounds like a lot, but divided out among 84,000 claims and it is $35,000. Yes, I know that not all claims will be compensated the same, but still. That's a pittance vs. $1+ million sexual abuse judgements. Will victims look at $35,000 (on average) + future insurance + future CO contributions and say "not enough"?

[Muttsy]

CS,

That’s a fair question. It would be such a complicated deal, the problem is how to communicate it. Just look at the high level discussions on this board. It takes time and effort to understand all the concepts. It’s a steep learning curve. 
 

I believe the insurance piece is not that risky. But it’s too risky if that is all the BSA is prepared to give which has been its position from the start. If there is 4B in LC assets and another 2-3 billion in BSA assets, how much do they have to surrender to get to a viable deal? Half? 
 

BSA’s and LC’s options are that or bleed out. 
 

Is BSA organizationally capable of making a decision of that magnitude? My sense is that it is not. 

[RememberSchiff]

Would there be any implementation, particularly who is in control, difference/risk between

The BSA, still in the exclusivity period and still in control,  bends and motions a new plan which is the complete TCC/Coalition/FCR plan.

versus

The exclusivity period ends, TCC/Coalition/FCR motions their complete TCC/Coalition/FCR plan.