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

[elitts]

54 minutes ago, Muttsy said:

"Adequate" is an impossible word to apply to the human carnage BSA caused. And it is especially arrogant coming from BSA to imply or suggest that it has the slightest idea of what it means. 

The word should be "acceptable" not adequate. What is acceptable is probably the going rate nationally which is in the neighborhood of $1-1.5M average case value. 

Does BSA or Chubb/Century have the ability to pay that amount even if they were all liquidated? No. 

So BSA should just shut up about compensation. They won't be deciding the question, the voting survivors will.

And that amount should be every penny that can be gotten. Even if getting the last penny takes 20 years of litigation by the Trustee. It's called justice. 

Actually, the judge will decide the compensation contribution, not the victims.  The victims merely get to vote on which plan they like.  Ultimately if the TCC puts forward a plan that takes everything and leaves the BSA with $100 in it's bank account and the victims all vote for that plan, the judge will still be able to say "Nope", and put her own plan in place.

52 minutes ago, CynicalScouter said:

One final note on "adequately compensated". The TCC has put out its "marker" for what adequate compensation looks like: $103 billion for 84,000 claims.

And the BSA has put out its marker for what adequate compensation looks like: $2.4 billion – $7.1 billion (page 24).

How did BSA come up with that? Pages 76-78 lays it out. Here's the summary

Using the average jury or settlement award for this calculation is rather silly as anything but a bargaining tactic.  Scale matters and you just can't ever use the cost/price/value of an individual item as a direct measure for the cost/price/value of a large group of them.  I mean, the average payout in the Catholic Church bankruptcies of $288,000 per victim even though individual jury awards were much higher.  I have to think we'll see a similar ratio here.

31 minutes ago, CynicalScouter said:

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.

This is one of the areas I struggle to comprehend also.  Particularly since the actual impact on the person probably aught to factor in and it's hard sometimes to envision how some of that stuff would impact other people.  I will say that in the matrix someone posted a while back, I kinda thought the breakdown was way to heavy on the mild end of things, even if those claims aren't nearly as numerous as the more horrific ones.

 

[CynicalScouter]

12 minutes ago, Muttsy said:

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

Yep. We've already seen the premium spikes, which lead to the fee spikes, which lead to the membership declines. Etc.

[Muttsy]

9 minutes ago, elitts said:

Actually, the judge will decide the compensation contribution, not the victims.  The victims merely get to vote on which plan they like.  Ultimately if the TCC puts forward a plan that takes everything and leaves the BSA with $100 in it's bank account and the victims all vote for that plan, the judge will still be able to say "Nope", and put her own plan in place

Incorrect. The judge will not be deciding the compensation contribution. This is not a real court or a real judge. 

This is let's make a deal court with the judge deciding....well, I can't think of anything she's decided. The parties will come to terms or the bankruptcy will be converted to a liquidation by the BSA or the judge will dismiss the bankruptcy. That's about the extent of her authority. A cram down would need substantial support from the survivors. I don't see it happening. 

[yknot]

14 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 want BSA to survive. Right now I don't trust it to. There are so many comments on this board and elsewhere that make me think that a reconstituted BSA would simply be the 2.0 version of what we have. If that happens, the next crisis is merely around the corner. The idea of making decisions now about scouting's future with the current leadership in place with no plan or road map that indicates any real internal analysis has taken place seems like history waiting to repeat itself. I was hopeful that bankruptcy would lead to a complete restructuring that would address some of the inherent dysfunction. It doesn't seem to be happening.  The only new plan I've been hearing for post bankruptcy scouting is the same plan we've been hearing connected to the old one: increase membership. 

[CynicalScouter]

Just now, Muttsy said:

. A cram down would need substantial support from the survivors.

As a matter of law: a cramdown doesn't require the consent or support of the survivors/claimants.

As a matter of practicality: no judge has ever ordered a cramdown where sexual abuse victims are involved.

[ThenNow]

1 hour ago, CynicalScouter said:

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 agree with you on the explanation. On this specific point, however, there's more to it than that (as you know). Three lost fingers on the left hand of Andres Segovia are "worth" more than the same three fingers on the hand of right-handed painter. Unfortunate, but true. Valuations have to factor lost income over those 50 years, enormously impacting the valuation matrix. That said, creating a baseline is tricky, but doable, I think. One the BSA side, some relative values are at least partially hidden within those mysterious settlement records.

[CynicalScouter]

2 minutes ago, yknot said:

I was hopeful that bankruptcy would lead to a complete restructuring that would address some of the inherent dysfunction.

The problem is that there is no external source or pressure (with one possible exception) that can change this.

As was pointed out earlier, if this was a poorly run company with shareholders, they could rebel and put in a new board. They cannot in BSA.

And even if they did, who would they get replaced with? During the NAM, it was pointed out that one of the biggest internal fights for years has been council-leaders vs. National HQ. It was pointed out that almost 2/3rds of the National Board are current or former Council leaders.

THAT IS THE PROBLEM. You want change? Real, systemic change? You are NOT going to get it form promoting the same old same old up the chain. Well, maybe, but it would be be accident. Not design.

The idea of hiring Mosby was he was the first non-insider in decades (ever?) to be in that position. Welp, that did no good. We are getting more of the same because they hired more of the same.

Now, here's the exception. I suppose, theoretically, the bankruptcy judge could order a bench clearing that removes all the board and appoints receivers at least temporarily. But that's theoretical and not something anyone (TCC, Coalition, etc.) is asking for.

[elitts]

15 minutes ago, johnsch322 said:

 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). 

BSA has influence over the LCs, not control.  It's very much like some of the more involved franchise agreements where the Franchisor can control virtually every aspect of how a business is supposed to operate, but in the end, if the franchisee decides to tell them to pound sand, the only action they can take is to revoke the agreement; they can't step in and implement the changes they want.

14 minutes ago, Muttsy said:

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?

Actually, assuming the bankruptcy is discharged, the "new BSA" organization wouldn't have ANY liability for claims made in the future if they occurred prior to the discharge since it would effectively be an entirely new organization.  That's why they'll probably be able to get insurance again.  After all, the insurance companies haven't dropped them so far, why would that change when their exposure would be exponentially smaller?

As far as safe, well, I'd be curious to know what "experts" you are talking about.  I mean, scouting can't ever be totally safe, but then nothing we have our kids doing is totally safe.  But "reasonably safe"?  Personally I think it's already "reasonably safe" and clearly so do all the people who still have their kids in the program.  I've let my son participate in activities for years that could result in death or serious injury;  the potential for abuse is just one of the risks people need to be considering and attempting to mitigate.  I mean, ultimately, much of the adult/youth sexual abuse could have been (and can be) avoided simply by being aware, talking to your kid in advance and paying attention to people's behaviors.

[CynicalScouter]

6 minutes ago, ThenNow said:

One the BSA side, some relative values are at least partially hidden within those mysterious settlement records.

Right, that will tell us what BSA paid out for prior, similarly situated victims.

That helps determine whose matrix is closer to reality: BSA's (haha, of course it is), TCCs (off, because no one is perfect), or both.

[100thEagleScout]

19 minutes ago, CynicalScouter said:

As a matter of law: a cramdown doesn't require the consent or support of the survivors/claimants.

As a matter of practicality: no judge has ever ordered a cramdown where sexual abuse victims are involved.

It would also die on appeal if she tried a cram down.

[Eagle1993]

In terms of this case, the judge has been very supportive of everyone, but has been very apparent she wants BSA to survive long term.  When she mentioned the letters, she said she couldn't read them all, but she emphasized that several indicated they want the BSA to survive.  She seems more focused on BSA's survival than maximizing a payout for claimants.

I've also followed the USA Gymnastics bankruptcy and that judge has ripped the Olympic committee and said dig deeper.  There is a major tone difference.  She has never said that to the BSA.  

While cramdowns never happen, I would not be shocked if she allows a vote on the current BSA deal and if it rejected, takes their Plan B as is and closes out the bankruptcy.  If she does anything else, she risks having the end of BSA on her hands and from everything she says, she doesn't want her name attached to the end of the BSA.  Perhaps the Coalition and others see this as a real threat as well, which is why they are working to improve BSA's deal.  There is a strong chance that there is no other option available.  

Tomorrow we will see (perhaps today if there is a last minute deal). 

[CynicalScouter]

40 minutes ago, johnsch322 said:

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).

Let me describe to you just how absurdly complicated this process of control is with something very basic: who hires the local Council executive?

The answer is National has a role: until 2-3 years ago ONLY "commissioned" professionals could be the Council Executive. That meant working your way up the ranks of the BSA (DE, etc.) and taking some BSA professional development courses.

So, this means that National controls the Council Exec, right? Nope. Because the hiring, firing, salary, disciplining, etc. of the Council Exec was controlled by the Council President, Council Board, or some combination.

So, that means that LC controls the Council Exec, right? Well, nope because while National could not and did not directly supervise the Council Exec, they had one trump card. Remember how I said to be Council Exec you had to be a "commissioned" professional? Well, National could revoke the commissioned status of anyone at any time. And since being a commissioned processional was a condition of employment, National could nuke any Council Executive at any time.

So, if I asked you: who "controlled" the Council Executive, the chief paid professional for the LC, what would you answer? National, or the Local Council?

This entire situation is not so clear cut as "LCs rule" or "National rules". Etc.

 

[CynicalScouter]

1 minute ago, Eagle1993 said:

I've also followed the USA Gymnastics bankruptcy and that judge has ripped the Olympic committee and said dig deeper.  There is a major tone difference.  She has never said that to the BSA.  

I also think USA Gymnastics shot itself in the foot with offering bonuses to its executives.

There's also a question of scope here: USA Gymnastics was 500 victims. This is easily 100 times that number. Dig deeper works, but only up to a point, especially if you expect the entity to survive.

Of course if you are OK with killing it off, then sure the judge can keep saying "dig deeper" forever.

[CynicalScouter]

8 minutes ago, Eagle1993 said:

While cramdowns never happen, I would not be shocked if she allows a vote on the current BSA deal and if it rejected, takes their Plan B as is and closes out the bankruptcy.

I've also suggested a Global Settlement may not have to hit 66.7% What about 66%? 60%? 50%+1? Etc. I know the law says 66.7% but she may order a cramdown of the global plan if it comes in a little short.

[ThenNow]

40 minutes ago, Eagle1993 said:

When she mentioned the letters, she said she couldn't read them all, but she emphasized that several indicated they want the BSA to survive.  She seems more focused on BSA's survival than maximizing a payout for claimants.

 

Having been on all the hearings, this is near the top of my greatest disappointments. I'm not happy with BSA, LCs, COs and insurers. 100% accurate. But the judge? See doesn't seem to "get it." It being why BSA is in this mess. Not reading the letters and/or cherry-picking and highlighting that "several indicated they want the BSA to survive" is cowardly and not judge-like imho. It's neither balanced nor  equitable. Hear us. BSA and the others have gone on AD NAUSEATING. If I had my way, there would be a full day of live testimony from survivors describing their experiences, including how the bankruptcy has and is effecting us. I would sign up in heartbeat and am more than willing to be vetted by anyone of the parties, provided I can't be excluded other than challenge for legitimate cause. BSA surviving is neither here nor there in my request and feeling. A fair and full hearing of all "sides" is all I want before this lunacy goes any further.

PS - I know. I know. I'm wishing on a shooting star...

Edited June 3, 2021 by ThenNow
Oops. Missed a spot.