Chapter 11 Announced - Part 5 - RSA Ruling

[CynicalScouter]

My new, estimated timeline for BSA to emerge from bankruptcy. All dates based on the original timeline for the Fourth Amended Plan. This means if there are NO hiccups whatsoever, BSA is out of bankruptcy by December 1.

If there is even the slightest delay, we are in to 2022. Past the recharter deadlines for most councils.

Remember how BSA said it needed to be out by August for cash flow?

Remember how BSA said it needed to be out by September for recruitment?

The next one will be "need to by out by December for recharter"

Event	Days from Disclosure Hearing	Guestimated Timeline
Disclosure Statement Objection Deadline	-9	Sunday, September 12, 2021
Disclosure Statement Hearing	0	Tuesday, September 21, 2021
Voting Record Date	0	Tuesday, September 21, 2021
Deadline to Mail Solicitation Packages and Related Notices	8	Wednesday, September 29, 2021
Rule 3018(a) Motion Deadline	24	Friday, October 15, 2021
Deadline to File Plan Supplement	31	Friday, October 22, 2021
Voting Resolution Event Deadline	45	Friday, November 5, 2021
Voting Deadline	45	Friday, November 5, 2021
Preliminary Voting Report Deadline	50	Wednesday, November 10, 2021
Plan Objection Deadline	56	Tuesday, November 16, 2021
Final Voting Report Deadline	59	Friday, November 19, 2021
Confirmation Brief/Reply Deadline	64	Wednesday, November 24, 2021
Confirmation Hearing	69	Monday, November 29, 2021

Edited August 21, 2021 by CynicalScouter

[SiouxRanger]

2 hours ago, CynicalScouter said:

You can’t “terminate” something that never started.

BSA is saying that, prior to 1978, there was no BSA insurance coverage of COs. Can’t terminate that which never started in the first place.

Pretty sure I understand the meaning of "terminate."  I also understand the principle of de minimus non curat lex, but that has broader application to matters beyond mere semantics.

The issue is:  resolving this discussion so that a single post clarifies and clearly states the issues relating to insurance for the benefit of all the posters and guests, namely:

1.  The significance of National's apparent position that its interests in the policies somehow end up in the Settlement Fund as assets.   

It is my understanding that when a debtor files a Chapter 11 bankruptcy petition, ALL of the assets of the debtor become assets of the debtor's bankruptcy estate and the debtor loses control over them until "exiting" bankruptcy, but retains the right to propose a Plan.

The debtor's task in drafting its Plan is to make it attractive enough to creditors so that they approve it, yet leave sufficient assets for the debtor to return to its prior business or operations, albeit with dramatically diminished assets. I am not sure what insurance interests National proposes be transferred to the Settlement Fund.  Abuse Claimants appear to be the sole class of creditors who will be beneficiaries of the Settlement Fund

2.  An explanation why the CO's seem to oppose National's Plan of transferring its insurance policy rights to the Settlement Fund.  If National's Plan with regard to the insurance policies makes no difference to the CO's they would not care, obviously.  There is the suggestion that the rights of the CO's are somehow diminished.

 

On the other hand, if all of the above is mere inexpert conjecture spread over dozens of posts,, and the issues really are:

 

1.  No coverage before 1978 at all, well that is straight-forward.  Discovery, document production, and an evidentiary hearing.  Policies exist, or they do not.  Persuasive evidence exists of National's representations to CO's that coverage exists (evidence of fraud on National's part, promissory estoppel, violations of consumer protection or business transaction laws, etc.), or it does not.

2.  Caps, aggregate and per incident, well, that is policy interpretation and mere math.  A Claimant abused three times on a single campout by one Abuser a single incident, or three?  Interpret the policy and you have an answer.  Same Claimant abused on 3 separate campouts by same Abuser?  Same Claimant abused on 3 campouts by different abusers?

3.  Apply insurance coverage to "direct claims" first (that is, claims against National) and then apply coverage to "indirect claims" second, namely, CO's, LC's and other third parties.  Or apply insurance coverage prorata between National, and the CO's, LC's and other third parties?  Again, read the policies and make a decision.  It could be a different decision for each policy as they may have different terms.

That @ThenNow, an attorney?, whose wife is educated in insurance matters, is confused, is proof enough that this issue needs to be clarified so we can move past conjecture and supposition.

I am not here to engage in energy-sapping debates.  I don't need or want to "win" debates, nor persuade anyone of anything.  I want to understand the process, the leverage held by the parties, the pressures applied, and the likely affect on the outcome. One has to understand these matters before one can evaluate the likely outcome(s).

This forum exists to discuss, resolve, clarify, and at least to arrive at a working hypothesis-perhaps later exploded, but which explains all the known issues at the time of its adoption.

So that everyone has some level of understanding which enables them to continue reading with a decent level of understanding.

If one does not sweep away the fog as one walks into it, one will forever walk in fog.

[ThenNow]

6 minutes ago, SiouxRanger said:

That @ThenNow, an attorney?, whose wife is educated in insurance matters, is confused, is proof enough that this issue needs to be clarified so we can move past conjecture and supposition.

Actually, I reported my head was throbbing and I was fighting off slumber. Furthermore, my wife has no interest in talking about BSA insurance matters after cursory briefings and hearing recaps. Knowing Chubb is a/the major player, she tells me, “Well, good luck,” and rolls her eyes. 

[SiouxRanger]

2 hours ago, vol_scouter said:

All states have mandatory reporting

My understanding of "mandatory reporting," at least in my state, is that only certain classes are mandatory reporters: physicians, counselors, etc... Lawyers are not.

Which raises the question, is anyone in the Claimant claim process a mandatory reporter?  I don't know.  It is like walking down a path: Claimant calls a law firm about a Claim.  Speaks with a receptionist, then an info intake person, that information is passed along to a somebody (firm case manager, junior attorney, etc.), then ultimately (maybe never, according to some) by the lead attorney, then filed, with the Court, and if not anonymously, then there is another chain of people having seen and having access to the details of the Claim. Are any of these folks mandatory reporters or are they barred from reporting due to client confidentiality ethics restrictions?

I don't know the answers, but those are the initial lines of inquiry.

[SiouxRanger]

On another matter of a council's plan fund its Settlement 'Fund Contribution, briefly:

My council's indicated the other day that our council was looking to obtain a loan to cover its Settlement Fund contribution.  Our camp is probably a restricted asset. I did not ask any questions-not the time or place. But what lender is likely to make a loan to an organization whose future is so murky and tenuous?  And, though camp may not be sold now, it wll certainly be mortgaged-we have only one.  So, if membership remains low, the likelihood of mortgage default is higher, and the council may lose it anyway.  (Just thought-can the Council mortgage restricted a asset without the consent of the holder of the restrictive rights? Probably not, but as no one I know is privy to the terms of the restrictions-not even the professional responsible for managing the camp-I can't say.)

[MYCVAStory]

10 hours ago, CynicalScouter said:

What if anything is to stop the TCC from posting the Berkeley Research Group Dashboards?

The TCC explained that it was the BSA that agreed to the use of the data as long as the dashboards weren't shared with any other entities.  The TCC though specifically invited the LC's to share their dashboard if they wanted.  The BSA's NDA prevented that.  Remember, at the meeting outside of mediation where the TCC explained the methodology it was the BSA as the Zoom host that pulled the plug before any LC was allowed to ask a question.

[MYCVAStory]

2 hours ago, CynicalScouter said:

My new, estimated timeline for BSA to emerge from bankruptcy. All dates based on the original timeline for the Fourth Amended Plan. This means if there are NO hiccups whatsoever, BSA is out of bankruptcy by December 1.

I hope it's 12/1 but....I spoke to someone involved and was told late today,  "Some time in Q1 of 2022, maybe even later in it"  is a lot more realistic.  The hand-to-hand combat and delays are still to come.  This sucks for every victim but is a reminder to settle in and focus on the fact that we're closer to the end than the beginning of the bankruptcy.  Then, a trust, and insurer fights for those insurers that  don't settle pre-bankruptcy....that's possibly years.  Sorry.  Not news anyone wants to hear and I hope I'm way wrong but given the history of it and holiday slowdowns I don't think so.  Sometimes though it's better to know reality and be able to face it than it is to get your hopes up unrealistically and be crushed.  Sorry.   If it;s Q1 then it will have taken two years.   That's a lot longer than the six months from now.  A dose of hopefully positive perspective to end this comment.

[David CO]

1 hour ago, SiouxRanger said:

But what lender is likely to make a loan to an organization whose future is so murky and tenuous?  

My teacher retirement plan.  

[fred8033]

5 hours ago, SiouxRanger said:

1.  No coverage before 1978 at all, well that is straight-forward.  Discovery, document production, and an evidentiary hearing.  Policies exist, or they do not.  Persuasive evidence exists of National's representations to CO's that coverage exists (evidence of fraud on National's part, promissory estoppel, violations of consumer protection or business transaction laws, etc.), or it does not.

Is "No coverage" before 1978 may not be a clear cut?   

• 43 years ago.  Insurance practices, policies and laws have changed. 
• Loose agreements.  BSA's communications with COs has always been pretty loose.  Not really legal agreements and more like marketing agreements.  Only now being interpreted as contracts.  
• Self-insurance?  I could see BSA having practiced self-insurance for CO liabilities.  It was more a general statement about BSA being behind the CO and supporting the CO.  "if it exceeds what you can cover, BSA will be there to help" ...  Many companies still self-insure.
• Most importantly, no one in 1978 could conceive of the modern era settlements.  In a 1978 context, BSA could have easily self-insured their COs and covered incidents.  Bigger cash reserves.  More members.  More donations.  Drastically smaller settlements.

[CynicalScouter]

Someone posted on a FB group that, due to the delayed hearing, the full list will NOT be released yet/will be released just before the September meeting.

That said, lots of councils went ahead and announced anyway.

[CynicalScouter]

11 hours ago, MYCVAStory said:

The TCC explained that it was the BSA that agreed to the use of the data as long as the dashboards weren't shared with any other entities. 

That answers that. Thanks.

I would assume that since the TCC signed off on the deal by which councils contributed $550 million in cash and property + $100 in a note/loan to be paid off over time, they are not objecting to the OVERALL package even if perhaps in their view SOME Councils are getting off light.

[CynicalScouter]

7 hours ago, fred8033 said:

Is "No coverage" before 1978 may not be a clear cut?   Loose agreements.  BSA's communications with COs has always been pretty loose.  Not really legal agreements and more like marketing agreements.  Only now being interpreted as contracts.  

That's absolutely the LDS' view.

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/82a47dab-b75d-43b7-ae01-00b6dc8a17b0_3263.pdf

Quote

ii. The Church Is an Insured
12. There has been a long and well-documented partnership between the BSA and the Church. A review of that history demonstrates that the Church’s involvement in scouting activities has always been premised upon the expectation and agreement between both parties that the Church would be protected by the BSA for any injuries or wrongdoing connected to those scouting activities. In other words, it has always been the intent of the BSA that the Church would be covered under BSA’s insurance for any claims or losses the Church might face as a result of scouting activities.

and they want to fight about it.

Quote

16. Any dispute regarding the extent of the Church’s rights to insurance policies can only be adjudicated through an adversary proceeding. Simply put, the Plan may not dispense with those rights based on a summary adjudication in connection with the confirmation hearings or otherwise.

So we are getting into what BSA "intended" for the COs. And this gets into BSA's loose language over the years.

Again, the entire CO system is a house of cards. CORs not really paying attention/checked out. COs that barely knew they had a unit. No one paying attention.

And now it is coming back to haunt.

Edited August 21, 2021 by CynicalScouter

[CynicalScouter]

11 hours ago, MYCVAStory said:

I hope it's 12/1 but....I spoke to someone involved and was told late today,  "Some time in Q1 of 2022, maybe even later in it"  is a lot more realistic.

I concur. And even BSA mapped out a March 2022 cashflow scenerio.

[RandomScouter]

(raising hand from the back of the room)

So, my brain feels like teflon when it comes to some of this...

What is supposed to be disclosed at the upcoming disclosure hearing and why is it such a Big Deal?

I have no background in law or financial stuff (like bankruptcy) or insurance.  I'm trying to follow what is going on, but I get so confused.   

[vol_scouter]

41 minutes ago, CynicalScouter said:

So we are getting into what BSA "intended" for the COs. And this gets into BSA's loose language over the years.

Again, the entire CO system is a house of cards. CORs not really paying attention/checked out. COs that barely knew they had a unit. No one paying attention.

And now it is coming back to haunt.

This has long seemed to me to be a key issue.  We have no information about any caps on the coverage per incident or the aggregate coverage.  

The CO system provides a key component for Scouting - a meeting place.  Some have talked about money from COs but in the near past it was only $40 per unit chartered.  Today it is $75 per unit.  According to Wikipedia, there are 103,158 units in the BSA that would generate $7,736,850 a year.  While that is not inconsequential, it is not a huge compared to $72.00 each for traditional member and $45 for each adult volunteer.

In the 1960's, child sexual abuse was just becoming known as a problem to society and the large award lawsuits were in the future (this is an observation and not a defense).  So the local councils and chartered organizations thought of liability in terms of accidents - not child sexual abuse.