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

[Eagle1993]

BSA's latest financials

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/2f5112e6-d8c5-4fe3-b63b-dab01932cba9_5180.pdf

They gained $4.4M over the month of April 2021 in available cash.  In 2020, they gained $1.2M.  Now the details

in 2021, we are seeing higher income from HA bases (+$2M), Supply (+$3M) and transfers from investments (+$11M) than 2020.

On the cost side, payroll is up ($3M),, trade AP is down ($0.7M), and a combination of other expenses & capex increased ... so total non bankruptcy expenses are higher in 2021 ($4M).

Bankruptcy expenses are up by $9M

So expenses up $13M, income up $16M shows an increase over April 2020 for net by $3M.

I think the concern here is the transfers from investments.  I cannot imagine that continues indefinitely.

Plus ... in 2020 we didn't have HA bases very active, now we will have have the higher C&B to cover it.

Now .. May 2020 we lost $5M.  That is with lower C&B and much lower bankruptcy rate.  

 

[CynicalScouter]

3 minutes ago, johnsch322 said:

I wonder more about what individuals feel.

First, keep in mind that the mods have asked us not to be graphic, so rather than describing the sexual acts list in the BSA matrix and the TCC matrix, I am going to use something else, ok?

So, I don't know what the right answer is between the value of, say, losing an eye and losing an arm. Or losing a finger vs. losing 3 fingers. Clearly there has to be some kind of matrix that in fact lays this out. The difference is in terms of valuation of the claim: yes, I lost 3 fingers and so should get roughly 3 times as much as the person who lost 1 finger. But that just gets us back to the value of the loss of a finger over a lifetime/50 years.

I just don't think any of us can come up with that number, although obviously TCC and BSA have come up with their versions. This is so far outside my depth I couldn't even fathom how you calculate that number.

So, I don't think I'll ever know or answer what I think losing a finger costs vs. losing an eye. And even if I did have my own answer, it would be amateur speculation and pulling random numbers out of the air. In other words, useless and likely hurtful/insulting to victims.

[CynicalScouter]

4 minutes ago, ThenNow said:

we believe the Chapter 11 process – with the proposed Trust structure – will provide equitable compensation to all victims while maintaining the BSA’s important mission.”

Right, this has ALWAYS been a two-part quote: adequate or equitable compensation that allows BSA to continue its mission.

And BSA has said that for it, that number is $500 million.

[Muttsy]

4 minutes ago, CynicalScouter said:

And if the voting survivors decide no amount of money that BSA puts up (forget about the LCs, the COs, and the insurance companies for a second) is enough, then BSA should die?

That's the key problem the judge is facing: it may be that NO amount the BSA offers will EVER get 2/3rds vote (again, $1.4 billion/82,500 claims = $17,000).

Mismanaged and criminally managed corporations die all the time. Think Enron, Madoff Investment Securities LLC, Arthur Anderson LLP , yada yada yada. 

Where on earth does this concept come that BSA has this privilege that no other corporation possesses? Being a non-profit is partly the cause of it being on the brink.

. If it had been a for-profit, there would have been shareholders  who rebelled and who would have gotten rid of the National Board and put in new management decades ago. Hundreds of lawsuits is bad business. Shareholders understand. 

Here there was no one watching the store. The insiders ran it. The National Board was filled with clueless dignitaries who never bothered to ask the question...."so, I saw that piece on ABC News 20/20 (1988) or the series in the Washington Times etc etc about these Ineligible Volunteer files...what are they and may we see them." 

Where was the oversight? Where was Tillerson, Gates, and the big shots from yesteryear?

No, this is why great empires fall. Not from attack from outside enemies but by internal rot. 

[CynicalScouter]

9 minutes ago, Muttsy said:

Where on earth does this concept come that BSA has this privilege that no other corporation possesses?

The Congressional Charter gives it "perpetual existence", for one.

9 minutes ago, Muttsy said:

If it had been a for-profit, there would have been shareholders  who rebelled and who would have gotten rid of the National Board and put in new management decades ago.

And here again is where the Congressional Charter gets in the way: the National Executive Board selects all future members of the National Executive Board. So, it was literally impossible for any rebellion.

Quote

An executive board composed of citizens of the United States is the governing body of the corporation. The number, qualifications, and term of office of members of the board are as provided in the bylaws. A vacancy on the board shall be filled by a majority vote of the remaining members of the board.

Edited June 3, 2021 by CynicalScouter

[CynicalScouter]

7 minutes ago, Muttsy said:

Mismanaged and criminally managed corporations die all the time. Think Enron, Madoff Investment Securities LLC, Arthur Anderson LLP , yada yada yada. 

Yes, but the point is the judge has said she is NOT going to let BSA die, and BSA cannot be forced to liquidate (it may voluntarily do so), so what is the solution?

Or do you simply want BSA to die?

[100thEagleScout]

Just now, CynicalScouter said:

Yes, but the point is the judge has said she is NOT going to let BSA die, and BSA cannot be forced to liquidate (it may voluntarily do so), so what is the solution?

Or do you simply want BSA to die?

While BSA can’t die on paper, it certainly can become so financially strained that it ceased operations indefinitely and essentially “dies”.

[CynicalScouter]

1 minute ago, 100thEagleScout said:

While BSA can’t die on paper, it certainly can become so financially strained that it ceased operations indefinitely and essentially “dies”.

True. Is that what you want? If so, then it appears the answer to the previous question of what is "adequate compensation" from BSA is "no such number exists."

[100thEagleScout]

1 minute ago, CynicalScouter said:

True. Is that what you want? If so, then it appears the answer to the previous question of what is "adequate compensation" from BSA is "no such number exists."

I’m only saying that’s the reality of the situation.  Insurance has plenty of liabilities to cover the cost with a battered and beaten BSA coming out of bankruptcy and barely surviving liquidation.  Whether they pay is a different story.  If there isn’t a solution soon I can only see this case escalate in tensions.  BSA will say “oops we’re out of money”, BSA professionals will be working for no pay, lawyers will still be charging the same outrageous fees they have this entire year, and local councils will be forced into their own Chapter 7 and 11s.

[Muttsy]

1 minute ago, CynicalScouter said:

The Congressional Charter gives it "perpetual existence", for one.

And here again is where the Congressional Charter gets in the way: the National Executive Board selects all future members of the National Executive Board. So, it was literally impossible for any rebellion.

 

CS, the Congressional Charter issue is a widely misunderstood thing. There are papers from the Congressional Research office that advise Congress on endless subjects including Congressional Charters. BSA is not the only entity to have a Congressional Charter. There are several others. The CRO says the charter imparts no responsibility on the US Government. The Charter is in the nature of an Honorarium --symbolic. It does not impart perpetual existence.  BSA is incorporated in the district. It is subject to the corporate laws of the district. The Attorney General for the District of Columbia (not the Justice Department) has the power to initiate a lawsuit seeking to judicially dissolve the BSA's corporate existence. This is a power that is not infrequently exercised to deal with corporations committing criminal and socially-injurious acts. BSA's corporate existence could be judicially terminated without an act of Congress. 

His name is Karl Racine. https://oag.dc.gov/

[CynicalScouter]

1 minute ago, Muttsy said:

BSA's corporate existence could be judicially terminated without an act of Congress. 

So, I'll ask you the same question: is it your view the BSA should simply be ended?

[CynicalScouter]

3 minutes ago, 100thEagleScout said:

I’m only saying that’s the reality of the situation.

I understand, but my question still stands. All other things being equal, do you want to see BSA survive or not? I've read through many of the victim statements/letters to the judge.

ALL (or effectively all) say they want BSA to pay/be held accountable.

• SOME letters say "and BSA needs to end."
• SOME letters say "BSA needs to survive"
• SOME letters are simply silent on the subject

Etc.

[100thEagleScout]

1 minute ago, CynicalScouter said:

I understand, but my question still stands. All other things being equal, do you want to see BSA survive or not? I've read through many of the victim statements/letters to the judge.

ALL (or effectively all) say they want BSA to pay/be held accountable.

• SOME letters say "and BSA needs to end."
• SOME letters say "BSA needs to survive"
• SOME letters are simply silent on the subject

Etc.

It’s a difficult decision for me because I loved the program, but I believe the program will survive past the organization somehow.  So, I’d say I’m in the BSA needs to end camp should a solution not be found.

 

I haven’t liked the BSA’s decisions for a long time now that isn’t just limited to this bankruptcy.

 

BSA tries to use CCP-style tactics of saying without them Scouting cannot survive.  That is a LIE, I know a new program can be made and we will continue to encourage the current program until it can be substituted.  Sure, there will be no more Eagle Scouts but a new equivalent award can be made.  It wouldn’t be completely reinventing the wheel and we could draw together input from current Scouts, minority groups BSA states they want to include and survivors still active within the organization to create a better organization for the program with less stupid rules and more safety for children.

[johnsch322]

6 minutes ago, CynicalScouter said:

I understand, but my question still stands. All other things being equal, do you want to see BSA survive or not? I've read through many of the victim statements/letters to the judge.

ALL (or effectively all) say they want BSA to pay/be held accountable.

• SOME letters say "and BSA needs to end."
• SOME letters say "BSA needs to survive"
• SOME letters are simply silent on the subject

Etc.

I believe they should be allowed to exist and they should get another chance to prove that they are able to not make the past mistakes but victims should come first.  Victims should be adequately, fairly and justly compensated.  BSA should be actively going after the insurance company's (not just making meager agreements with back doors for them) and compelling the LC's to put up as much as possible not allowing them to be hiding behind a veil (BSA should come out and say we have control of the LC's because they do).  Not just trying to give the least possible in effort and monetary compensation.  

[Muttsy]

I don't care much about "shoulds." What I believe should happen about anything beyond my control is an exercise in navel gazing and self-induced frustration. I prefer to use facts and analysis to come to a conclusion about what I think is a probably outcome. If BSA dies, it will be the result of a slow suicide. 

I think that you and several others are seeing the end of days and the probably outcome of this bankruptcy. Anything is possible but a plan that leaves a shrunken BSA to emerge from bankruptcy. There will be assets to distribute but after confirmation the Trustee will pursue the insurance assets and the LC's and CO's and bring in more assets to the Trust. Survivors will get "awards" or points from which they will receive a their individual percentage of the recoveries as they come in to the trust. Survivors will get a series of distributions over time. 

Yes, BSA will die, eventually. It may not even survive five years after it emerges..

There will be more victims who will come forward that were abused after the filing date 2/20/20 who will not be barred by the channelling injunction from filing lawsuits. Anyone who believes BSA will protect children in future because its "learned its lesson" doesn't understand the history that brought it to this moment.

Experts say that the scouting model cannot be made reasonably safe unless every parent is present for every event. That is not the BSA model. 

Finally, what insurance company is ever going to issue liability coverage to BSA? Or it will be cost-prohibitive. 

And what parent will entrust their child to a group that is so unsafe that it can't get insurance?